April 2014 - First Time Buyer Tracker
Help to Buy drives first-time buyers to pre-recession high in March
• First-time buyer sales climb to 31,400 in March – highest since August 2007
• Average first-time buyer deposit falls 10% in a year – to a three year low of £23,802
• Average LTV rises to 83.5% - the highest since October 2008, as higher loan to value lending rises
• Average deposit now worth 66% of income, down from 77% last year
The number of first-time buyers hit a six and a half year high in March, as Help to Buy enabled more high loan-to-value lending, according to the latest First Time Buyer Tracker from Your Move, part of LSL Property Services.
There were 31,400 first-time buyer sales in March 2014 – the highest monthly figure since August 2007, and 60% higher than twelve months before, as first-time buyer activity returned to pre-recession territory.
David Newnes, director of Your Move, part of LSL Property Services group, said: “The number of first-time buyers has returned to a pre-recession high, just in time for the one year anniversary of Help to Buy. More first-time buyers are seizing the opportunity to have a helping hand from the Government in putting together a deposit. Help to Buy has allowed the bottom of the market to stay buoyant, despite property prices increasing.”
“The bank of Mum and Dad is no longer the only go-to cash reserve for aspiring home-owners. Parents have seen their savings diminished by inflation and low interest rates. The government is stepping in to fill that void and help first-time buyers struggling to save for a deposit to get onto the ladder.
“There is an added benefit too. Extending the equity loan scheme will encourage more first-time buyers to opt for new builds. This goes some way to guarantee future demand for home-builders, thus encouraging them to develop more new projects. Even so, the scale of the home-building revival must be up-scaled, in order to give the next generation of would-be first-time buyers a fair opportunity to buy their own home.”
In the capital, the average deposit for a first-time buyer was £67,955 – more than double the average across the UK (£30,046). However, this didn’t hold back first-timers in the capital. There were 12,700 first-time buyer sales in London in Quarter 1 2014, the most of any region.
The cheapest region for first-time buyers was Northern Ireland. Here, the average first-time buyer purchase price was £90,816 in Quarter 1 2014 – 42% lower than the average across the UK (£155,502).
But Northern Ireland was not the cheapest region in terms of deposit size – that title went to Yorkshire & Humber. The average first-time buyer deposit was £15,280 in Yorkshire & Humber in Quarter 1 2014, half of the average across the UK (£30,046). Proportionally, the average first-time buyer deposit in Yorkshire & Humber was worth just 14% of the total property purchase price.