First-Time Buyers Hit Highest Level for 11 Years

2017 turned into a bumper year for first-time buyers, according to the latest figures to come from UK Finance. Last year saw 365,000 first-time buyers making it onto the housing ladder. This was an encouraging increase of 7.4% compared with the previous year. It meant around 25,000 more first-time purchases were made in 2017 as opposed to 2016. It was also the highest figure in this category since 2006. However, while last year proved to be a successful one for people wanting to buy their first property, experts are not expecting the pattern to continue. The year closed with weaker figures noted in December, a factor that is set to continue into 2018. Interest rates have already gone up, and they are expected to rise again in the coming months. This could influence the number of people taking out mortgages compared with last year. More first-time buyers, but fewer movers Further information from UK Finance confirmed the number of people moving home was down last year. The market experienced a drop of 3% in this area compared with 2016. “Subdued growth” is expected to become the norm in 2018, following on from the lower figures seen in December. How long will the pattern last? “Many people were able to get onto the housing ladder last year,” said Darren Pescod, CEO of The Mortgage Broker Limited. “While we saw 25,000 more people making that all-important first home purchase, this is unlikely to continue given the current climate. Indeed, the end of the year did not bode well for the coming months. It could well be those looking to buy their first home have a tougher time in the coming year than we saw last year.” Average age of first-time buyer was 30 While much has been written about people not being able to get onto the housing ladder until they are much older, the average age of a first-time buyer is currently 30. The average household income per year is £41,000. This figure applies in all cases, whether there was a single person or a couple in the household. The average person moving home, however, was nine years older at 39. Their annual income was revealed to be £55,000 – again, the household income that could be earned by a singleton or a couple. How will the figures look 12 months from now? “There is every chance we are going to see a drop in first-time buyers in the coming months,” Darren Pescod added. “It is hard to imagine we won’t see another rise in interest rates before the year is out, and it could well occur long before that. Any rise in rates will put more pressure on those looking for an affordable mortgage. The time of rock-bottom rates has gone, although it should be noted today’s rates are still far more affordable than they have been in the past. First-time buyers may find it harder to get onto the housing ladder this year.”

Published on 20 February 2018

See all posts in the Latest category