The number of first time buyers taking the first steps on the property ladder are half of all mortgaged purchases in 2018.
A total of 367,038 first time buyers secure mortgages to buy their first home in 2018 and represent 50% of all new purchases according to an analysis by Yorkshire Building Society.
The number of first time buyers is up 1.1% from 362,800 in 2017 and now exceeds the level in 2007 when 359,900 purchased their own home.
Since the financial crisis first time buyer numbers reduced to 192,300, almost doubled in the last decade and the 2018 figures are only 9% lower than the pre-crisis peak of 402,800 in 2006.
Strong rise in buyers over a decade
For 2008 the first time buyers numbers dropped -47% year-on-year following the collapse in the number of mortgages offered by lenders.
The following table from the Yorkshire Building Society the number of first time buyers in the last decade and the share of all purchases.
| Year | FTB numbers | Share of purchases |
|---|---|---|
| 2008 | 192,300 | 38% |
| 2009 | 196,700 | 38% |
| 2010 | 199,400 | 37% |
| 2011 | 193,700 | 38% |
| 2012 | 217,900 | 40% |
| 2013 | 269,500 | 44% |
| 2014 | 309,100 | 46% |
| 2015 | 309,400 | 46% |
| 2016 | 337,200 | 48% |
| 2017 | 362,800 | 49% |
| 2018 | 367,038 | 50% |
Numbers of purchases in 2011 were 193,700 increasing over three years to 309,100 in 2014 and continued to rise to 367,038 in 2018.
The strong rise in first time buyer numbers was also made possible with the government’s Help to Buy scheme introduced from April 2013.
In 1995 the proportion of first time buyer mortgages reached a high of 53% with the remainder of the market being home movers and buy-to-let investors.
This is in contrast to the slowdown in new purchases for buy-to-let investors after changes to stamp duty and taxation allowance on mortgage interest makes it less attractive to buy.
Nitesh Patel Yorkshire Building Society’s Strategic Economist said, buying your first home remains tough for many, but it’s encouraging to see first-time buyer levels at a 12-year high and climbing.
Low mortgage rates help buyers
According to Moneyfacts the average mortgage rate available to those with a 5% deposit or 95% loan to value is at 3.54% reducing from the typical rate of 4.15% a short time ago.
The availability of first time buyer mortgages has increased with 304 offered by lenders for those with 5% deposits up from 217 earlier in the year and only 18 in 2008.
Nitesh Patel said, the figures indicate that government initiatives such as Stamp Duty relief, Help to Buy equity loans and Help to Buy ISAs may have made an impact.
Over the past three or four years, we’ve also seen more mortgage lenders offering 95% loan-to-value mortgages, as well as strong competition driving mortgage rates down,says Ms Patel.
For older homeowners lower rates has seen significantly higher activity with equity release buyers accessing property wealth with lifetime mortgages to help maintain their standard of living or even buy a more expensive home.
The lack of supply of houses and higher prices may mean remortgage buyers prefer to stay in their existing home and avoid the cost of moving.
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 a buy-to-let investor.
Learn more by using the property value tracker chart, mortgage costs calculator and equity release calculator. Start with a free mortgage quote or call us and we can take your details.
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 or friend.
