First-time buyer sales have climbed to their highest since the economic recession, according to new figures.
July saw the number of first-time home buyers reach 30,000, which is the highest since August 2007 and a quarter more than 24,100 a year before.
The data also revealed that the average first-time buyer deposit fell ten per cent year-on-year from £29,609 twelve months ago to £26,642 in June 2014 — a drop of almost £3,000 in a year, which means the average deposit as a proportion of income has also fallen.
Twelve months ago, the average deposit represented 82 per cent of a first-time buyer’s income but by July 2014 that had fallen to 72 per cent, with the average first-time buyer income standing at £37,000 in July compared to £35,843 a year ago.
However, while deposits have fallen, the average first-time buyer purchase price was found to have risen eight per cent over the last year — and six per cent over the last three months to £155,844 in July, with mortgage rates for first time buyers climbing for the fourth consecutive month.
July’s prices were up from three per cent in March to four per cent, which has in turn led to an increased proportion of income being used for mortgage repayments, climbing from 21 per cent to 22 per cent over the last three months, whereas a year ago mortgage repayments represented just 20 per cent of a first-time buyers annual income.
Regionally, the average first-time buyer purchase price topped £150,000 in five UK regions in the three months to July, with London standing at £251,061, while the South East was at £194,955, the East of England at £173,550, the South West at £155,484 and Wales at £152,970, according to the latest First Time Buyer Tracker from Your Move and Reeds Rains.
First-time buyers in the North East had the smallest deposits on average, at £10,710 in the three months to July, while the second cheapest region in terms of deposits was Scotland, with an average deposit of £15,005, followed by Yorkshire & Humber at £16,760. In the capital, the average first-time buyer deposit was £62,253 — twice the size of the average deposit in the South West and the South East.
Commercial director of LSL Property Services, which owns Your Move and Reed Rains, said: “A whole generation of young buyers were trapped on the side-lines of the property market as the economy recovered from the recession, struggling to save for a deposit whilst inflation remained stubbornly high, savings rates were stuck at a historic low, and real wages fell.
“But the recent increase in high LTV lending options — enabled by Help to Buy — has allowed them a shot at getting on the ladder at long last, and the number of first-time buyers has climbed to a seven year high.”
