May 2014 First Time Buyer Barometer

First-time buyers climb 8% in April, despite 

- 47% annual rise in first-time buyers, boosted by Help to Buy
- Average first-time buyer deposit falls 7.5% in last year – over £2,000
- The majority of first-time buyers believe MMR to be a positive step for the market

The number of first-time buyers grew 8% in the month to April and 47% year-on-year, despite the introduction of MMR, according to the latest First Time Buyer Opinion Barometer from Your Move. 

There were 26,300 first-time buyer transactions in April 2014, up 8% from 24,400 in March 2014.

Compared to last year, the number of first-time buyers was 47% higher in April 2014, with the revival in new buyers aided by the Help to Buy Scheme, which has facilitated more high loan-to-value lending. First-time buyer deposits fell 7.5% year-on-year to £24,618 in April. It was equivalent to a drop of over £2,000 from £26,623 in April 2013.

1 in 10 first time buyers (11%) say the financial assistance of Government schemes such as Help to Buy enabled them to get their foot on the property ladder. 

First-time buyer purchase prices rose 10% over the year to April 2014, reaching an average of £149,655. The average first-time buyer mortgage size has outpaced that growth (+15% year-on-year), enabled by greater high loan-to-value lending. In April, first-time buyers took out a mortgage worth £125,037 on average

David Newnes, Director of estate agents Your Move, part of LSL Property Services group, said: “The tightening of mortgage criteria hasn’t dampened the appetite for first-time-buyer property. Many more new buyers are making the jump onto the property ladder, while deposit requirements – and mortgage rates – remain relatively low. Many buyers are locking into fix-rate deals that promise low repayments for the next few years, offers that may not be around much longer.

“With real wage growth around the corner, and expectation that prices will continue to rise, getting on the property ladder is not only becoming more realistic, but more of a priority. The prospect of the end of Help to Buy may add further fuel to the momentum in the market.”

Read the full Barometer