First time buyer numbers on the way up
There were 21,900 first time buyer transactions in December 2012, 17.7% more than a year ago, according to LSL Property Services. In 2012 as a whole, 219,400 first time buyers used mortgage finance with a deposit to secure their first home representing a 14% increase on the total number in 2011.
The average mortgage rate for a first time buyer dropped to 4.6% in December, the lowest rate since March 2012, but the average deposit size for first timers rose to £28,525, 2.3% higher than in November. Meanwhile, 89% of registered tenants said they wanted to become a homebuyer, but only 14% expected to buy in 2013. Just over a third believed they would buy within five years, while one fifth didn’t believe they’d ever be able to buy.
David Newnes, director of LSL Property Services, said: “2012 saw more new buyers on the move than the previous year, but the first time buyer market is a long way from rude health. The Funding for Lending Scheme hasn’t yet been a panacea for the market, but it is bringing down rates for those buyers able to meet lenders’ requirements. The size of deposits renters must save before they can move into their first home isn’t yet reducing, and this remains the key stumbling block from preventing new buyer numbers returning to anything like their pre-crunch level.
The profile of a first time buyer
* The average first time buyer in December was aged 28 and had an income of £34,000
* Nearly half of all first time buyers in December required family help to buy – of those, 36% received direct financial help and 11% benefitted from an inheritance
* 45% of first time purchases were entirely self-funded in December.
* First timers were most commonly looking for houses with two or more bedrooms – 31% were looking for a two bed house and 40% houses with three or more bedrooms
* 29% of first time buyers expect house prices to rise in the next year, compared to 14% who expect them to fall
* First time investors expect to remain in their property for an average of eight years – 4% of first time buyers expect to stay in a property for less than two years.
Recent Posts on Property
Latest from Independent journalists on Twitter