First-Time Buyer Monopoly On Property Market Reaches 20 Year High

A recent report has highlighted that first-time buyers (FTBs) have made up the majority of the property market for the first time in over two decades.

The Halifax First-Time Buyer Review found that the 372,000 FTBs that bought houses for the first time in 2018 made up 50% of all house purchases with a mortgage. The last time FTBs were able to monopolise the market was in 1995, twenty-three years ago.

Although the 2% increase in the number of FTBs purchasing homes is a slowdown, it represented the seventh consecutive year that this section of the property market had increased.

Since the credit crunch of 2008 that caused the property crisis, FTBs have increased by 92%, helped in part by Government backed schemes like Help to Buy.

The statistics reveal that the average property price paid for a first-time home has increased by 39%, from £153,030 in 2008 to 212,473 in 2018. In contrast, the average house price has only increased by 30% in the last decade, potentially highlighting that schemes, like Help to Buy, have enabled FTBs to offer more for the homes they are buying and provided them the opportunity to enter the property market when they otherwise would have been unable to do.

As property prices have increased by an average of 30% over the last decade, FTBs have been forced to save more which equates to a reduced percentage of the property in the current market. The £21,366 average deposit in 2008 represented 14% of the average home’s value. However, in the current market, the average deposit of £32,841 is only 15% of a property’s value. In 2008, the same deposit would equate to 22% of the property’s value.

Russell Galley, Managing Director, Halifax, said: “New buyers coming on to the ladder are vital for the overall wellbeing of the UK housing market, and the continued growth in first-time buyers shows healthy movement in this important area – despite a shortage of homes and the ongoing challenge of raising a deposit.

“Last year was the first year that first-time buyers accounted for the majority of the market since 1995, which shows that the factors reducing some of the associated costs – such as continued low mortgage rates and Stamp Duty – are supporting the increasing number of people taking their first step on to the property ladder.”

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