UK property market: first-time home buyers at highest number since 2007

The number of first-time buyers across the UK has reached the highest level since 2007. 
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The number of first-time buyers in the UK is thought to be at the highest level for 12 years, according to a report by Yorkshire Building Society.

Last year saw 353,400 people get onto the property ladder across the UK, which is the most since just before the start of the financial crisis in 2007.

The building society used mortgage data from trade association UK Finance up to October 2019, alongside estimates for November and December, to calculate the total number of first-time buyers in 2019.

Nearly twice as many first-time buyers secured a mortgage last year as at the start of 2008, with those entering the property market now accounting for more than half of homes purchased with a mortgage.

Using schemes such as Help to Buy, along with the Stamp Duty relief introduced in late 2017, first-time buyers in the capital have found more affordable homes in outer boroughs, where there has been an influx of new homes-building, as well as wider investment in infrastructure.

On the ladder: the capital's first-time buyers have looked to regenerating outer boroughs for relative value in recent years
Shutterstock / Alena Veasey

With slow wage growth since the financial crash and increased demand for homes in the cheaper, outer boroughs, price growth has finally started to slow as affordability limits are close in.

A recent study from JLL predicts house price growth across Greater London at one per cent this year and 2.5 per cent next year, before it jumps to 4.5 per cent in 2022.

"In recent years first-time buyers have been helped by strong competition driving mortgage rates down to near-record lows, making borrowing more accessible,” said Yorkshire Building Society strategic economist Nitesh Patel, "Government schemes such as stamp duty relief, Help to Buy equity loans and Help to Buy ISAs will have made an impact.”

"This has seen the first-time buyer market bounce back from the financial crisis and perform better than other sectors, such as the home-moving and buy-to-let markets. However, buying your first home still remains tough for many."

Here are five tips for first-time buyers from Yorkshire Building Society:

1. Well before you start looking at properties, review your personal finances

If you are concerned about your current monthly outgoings, try to reduce these at least six months before making a mortgage application.

It is a good idea to check your credit report and make sure all the information shown is correct, before applying for a mortgage.

Make sure you appear on the electoral roll for your current address and check any records of loans and credit cards.

2. Use a mortgage cost calculator

Once you are happy with your finances, try out a mortgage cost calculator, available on mortgage lender or independent money advice websites.

This is an easy way to help you work out what you can afford and how much you would be able to borrow.

Factor in any deposit saved (usually at least 5 per cent to 10 per cent of the purchase price as a minimum) as well as legal and survey costs.

3. Speak to a mortgage adviser

A mortgage adviser will look at your income, any debts you have and your deposit to make an assessment on how much you can borrow.

They will also help explain how a mortgage works and the things you need to consider before buying your first home.

It is important to do this at the start of your house hunt, so your search is realistic.

Getting a mortgage offer in principle would show sellers that your finances are already in place, making you an attractive buyer.

4. Make a list of what is important to you

Consider the number of bedrooms, parking and outdoor space - and whether location is more important than the property.

It may be key to look at local amenities such as schools, shops and transport links too.

5. Be patient

Remember that house purchases rarely stick to the expected timeframes.

This will probably be one of the biggest financial commitments you will make in your lifetime, so it needs careful consideration.

Additional reporting by PA.

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