Number of first-time home buyers reaches seven-year high

The number of first-time home buyers in 2014 was at its highest level for seven years, according to the Halifax bank.

This was in spite of the fact that house prices rose by an average of 8.5% last year.

The Halifax says that 326,500 people bought their first home last year – a 22% increase on 2013 and the highest number since 2007.

The main reasons for the rise are thought to be cheap mortgage rates and better job prospects. The mortgages director at Halifax, Craig McKinlay, said: “”Improving economic conditions and rising employment levels have boosted confidence among those thinking about getting on to the housing ladder for the first time.””

A 7% fall in the average deposit required by lenders also helped potential buyers to enter the market.

The fact that mortgage rates are now historically low may have provided another boost to sales. The Halifax says that in the third quarter of 2014, first-time buyers were spending 32% of their disposable income on their mortgage. That compares to 50% in 2007.

Government schemes such as Help to Buy were another major factor in the rise in the number of first-time buyers. The schemes are based on the government providing loans or guarantees to make it easier for buyers to get a mortgage.

More than 73,000 homes had been bought this way up to November last year. The average price for the homes was £212,000, well below the UK average of £271,000.

Please contact Eugene Pritchard if you would like more information about the legal aspects of buying or selling a home.