The number of first time buyers is 22% up and a seven year high, says the Halifax and helped by high loan to value mortgages.

New data from the Halifax, part of the Lloyds Banking Group, shows 90% loan to value mortgages have returned helping a 22% rise in first time buyers.

The number of first time buyers has reached 326,500 in 2014, the highest level since 2007 when the figure was 359,900 although significantly lower than the 2006 level of 402,800.

New purchases have improved since reaching a low of 192,000 during the financial crisis and since 2012 the number of first time buyers has been increasing despite competition from buy-to-let investors.

Deposits reducing in value

The amount of money a first time buyer needs to buy their first home has reduced in recent years falling from 20% in 2013 to only 17% in 2014. This remains significantly higher than the 10% required in 2007.

There are now a larger number of mortgages with a loan to value of 90% requiring a smaller deposit of 10% of the property value. The proportion of 90% loan to value mortgages has increased from 26% in 2013 to 31% in 2014.

Average deposits across the UK are £29,200 or 17% of the property value with the largest in greater London representing 24% of the property value or £78,800 deposits and the lowest is Northern Ireland with £16,700.

The top ten least affordable areas for first time buyers are all in London. At the top of the list is Camden is with a house price to average earnings ratio of 11.4 and an average property price of £614,300.

Without family help to upsize, the only option is for remortgage buyers to stay in their existing home and continue saving more for a bigger deposit.

First time buyers can receive help for the deposit on a property as the equity release buyer can access money using a lifetime mortgage.

Help to Buy boosting first time buyers

According to the Halifax house prices in the UK increase by 8.5% in 2014 but for first time buyers this figure was 9% with an average price of £171,800 and the highest is London where the average is £323,300.

About 80% of those using the Help to buy scheme are first time buyers.

Help to buy is available in two parts with an equity loan scheme for new build properties only. The government provides a 20% interest free loan of the property value, requires a low 5% deposit and the balance is a 75% loan to value mortgage.

There is also a mortgage guarantee scheme are for both new build and existing homes requiring a small 5% deposit and the government guarantees the lender 15% of the property value. This is also available to home movers as well as first time buyers.

The homebuyer needs a 95% loan to value mortgage from a lender but due to the guarantee the lender can offer more attractive rates.

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 to improve your quality of life or help your children start or expand a business.

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 calculator.

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