Data from the CML shows that 52% of first time buyers received financial help from the bank of mum and dad in 2014 to buy their first home.
In 2014 there were 300,000 first time buyers and 48% did not require assistance with the deposit, says the Council for Mortgage lending (CML).
There has been a sharp rise in the number of people that do not need assistance compared to the proportion just after the financial crisis which reached a low of 34% in the second quarter of 2009.
Last year government schemes such as Help to Buy where only a 5% deposit is required have boosted a rise in mortgages with a 95% loan to value (LTV) making it easier for first time buyers.
Mortgages now more accessible
The Help to Buy scheme started by the government has assisted 88,420 people in purchasing their first home and has boosted lender products in the market. Of this 94% of the properties were outside of London in the regions.
In particular the mortgage guarantee part of the Help to Buy scheme that offers lenders a guarantee on mortgages up to 95% loan to values has been most popular in the north-west of England.
There has been a significant increase in the number of mortgages requiring smaller deposits as low as 5% allowing first time buyers to raise a deposit without family assistance.
First time buyers now account for 48% of all purchases in 2014.
With competition from buy-to-let investors and reduced supply of suitable properties, prospective home buyers must continue renting and saving for a bigger deposit.
Throughout the country there have been improvements in the number of people buying homes without assistance except for London. This has seen the smallest improvement due to affordability pressures and they still need help with their deposits.
Without family help to upsize, the only option for some remortgage buyers is to stay in their existing home and continue saving more for a bigger deposit.
Types of first time buyers
The CML survey for 2014 breaks down the types of first time buyers as unassisted, assisted, Help to Buy equity loan and Help to Buy mortgage guarantee.
Help to Buy equity loan (HTB1) is considered similar to an assisted first time buyer as the government providers the buyer 20% in equity. Both these types have a loan to value of 75% although loan to income multiples differ.
For assisted buyers the loan to income is 3.73 times whereas HTB1 is 3.49 times and average incomes are £33,693 and £40,500 respectively.
First time buyers can receive help from family members as the equity release buyer can access cash using a lifetime mortgage and gift the deposit for a home.
Unassisted and Help to Buy mortgage guarantee (HTB2) are similar as the deposit must be provided by the buyer and the balance secured by a mortgage. The loan to value for the unassisted buyer is 90% whereas HTB2 is 95%.
For unassisted buyers the loan to income is the lowest at 3.19 times whereas HTB2 is 3.41 times and average incomes are £42,000 and £38,200 respectively.
The CML have said that affordability remains stretched and some first time buyers have found affordability more difficult under new regulatory standards imposed on lenders.
What are your next steps?
Call our LCM mortgage brokers for advice if you are a first time buyer, want to remortgage your existing home for the best mortgage deal, moving home or are a buy-to-let investor.
For equity release buyers our London City Mortgage advisers can recommend lifetime mortgages allowing you to receive cash from your property for home improvements, holidays or even give to a family member.
Start with a free mortgage quote or call us and we can take your details. Learn more by using the property value tracker chart, mortgage cost calculator and equity release mortage calculator.
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