November 2014 First Time Buyer Barometer
FIRST TIME BUYER DEMAND STABILISING
· October sees 26,500 first-time buyer completions – up 1% compared to 26,300 a year ago
· Average first-time buyer purchase price climbs 4.1% year-on-year to £152,684 in October
· Lack of understanding over new regulation: Four in ten buyers think LTI caps mean it is now more difficult to get a mortgage than six months ago
The number of first-time buyer house completions stalled in October, as demand began to ebb away at the bottom of the market, according to the latest First Time Buyer Opinion Barometer from Your Move.
There were 26,500 first-time buyer completions in October 2014, 0.8% more than a year ago, and 1.1% fewer compared to 26,800 in September. First-time buyer transactions have now fallen back 12.3% over the last three months, however the rate of slowdown is beginning to ease. A monthly slowdown of 1.1% between September and October compares to falls of 7.3% between August and September and 4.3% between July and August.
The average purchase price for a first-time buyer property rose 4.1% year-on-year to reach £152,684 in October 2014. Over the same period, the average first-time buyer deposit has fallen 6.0% - boosted by a greater variety of options for higher LTV borrowers – and now sits at £26,046, compared to £27,719 a year ago. The size of an average first-time buyer mortgage climbed 6.5% year-on-year in October to £126,638.
David Newnes, Director of estate agents Your Move, said: “Help to Buy reinvigorated the bottom of the market by adding that vital ingredient – confidence. But other factors have pulled this back over the last few months: confusion over a base rate rise, global uncertainty, falling house prices and an inadequate supply of affordable homes have all contributed to a hesitation among first-timers about whether now is the right time for them to buy.
“Stalling first-time buyer completions is down to dipping demand, rather than mortgages becoming less accessible. Compared to a year ago, there are now options for first-time buyers unable to save up large deposits to get on the ladder. Cheaper rates have also played a part, by allowing first-time buyers to lock into cheaper monthly repayments.”