Positive signs for the property market as the number of first-time buyers entering the market has reportedly reached its highest level in over a decade. According to new analysis measuring the amount of mortgage applications for first time buyers, activity has returned to levels not seen since before the global financial crisis (GFC) or “credit crunch”.
First-time buyers are estimated to have secured 367,000 mortgages in 2018. For context, this is 4000 more than the previous year and two consecutive years where the number is higher than the 2007 (pre-financial crisis) figure of 359,000. Post GFC the number of first-time buyer mortgage applications dropped right down to 192,000. What is also significant is that this recent return to pre-GFC levels has occurred in line with first-time buyers accounting for half of all homes bought with a mortgage.
The research, conducted by Yorkshire Building Society (YBS) closely reflects recent data on first-time buyers from HMRC. Recently released figures indicate that most first-time buyers are benefitting from recent changes to their stamp duty treatment. Other government initiatives such as Help to Buy may also be having an impact.
Mortgage rates are also at an all time low for first time buyers. More products are targeting this demographic specifically.
“Getting on to the housing ladder is still not an easy step for many young people, as demonstrated by the increasing numbers who have received help from the bank of Mum and Dad,” said YBS Strategic Economist Nitesh Patel.
“Despite these challenges, the first-time buyer market has bounced back following the financial crisis to out-perform other sectors, such as the home-moving and buy-to-let markets. 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.”