First-time house buyer market at highest level in years

Home truths over housing policy

THE NUMBER of first-time buyers getting on the property ladder with a mortgage in the last 12 months was at its highest level since 2006, according to estimates from a building society.

Across the UK, 367,038 firsttime buyers secured mortgages in 2018, up from 362,800 in 2017, analysis from Yorkshire Building Society suggests.

The figures suggest first-time buyer levels now represent half (50 per cent) of all homes bought with a mortgage. The Yorkshire said its findings indicate the first-time buyer mortgage market share across 2018 reached its highest levels since 1995, when 53 per cent of all mortgage-financed homes were bought by first-time buyers.

It made the calculations based on market-wide first-time buyer data from trade association UK Finance using figures which run up to October. The society also estimated figures for November and December based on previous first-time buyer patterns.

The analysis indicates the number of first-time buyer mortgages in 2018 was nearly double of that in 2008 (193,300) and stood just nine per cent lower than a pre-crisis peak of 402,800 in 2006. Nitesh Patel, Yorkshire Building Society’s strategic economist, said: “Property prices have grown at a faster rate than wages over the past decade, which has created difficulties for first-time buyers.

“Various factors have helped to alleviate this challenging environment, although the market is still pretty tough for those wanting to become homeowners.

“However, the figures indicate that Government initiatives such as stamp duty relief, Help to Buy equity loans and Help to Buy Isas may have made an impact. Over the past three or four years, we’ve also seen more mortgage lenders offering 95 per cent loan-to-value mortgages, as well as strong competition driving mortgage rates down.”

He said while buying a home may have become more accessible in some ways “getting on to the housing ladder is still not an easy step for many young people”.

IT DOES bode well that the number of first-time buyers gaining a foothold on the property ladder in the last 12 months was at its highest level since 2006 according to Yorkshire Building Society.

This shows that the Government’s Help to Buy scheme, or its many variations, is beginning to make a difference. Yet, while this is welcome, it could be short-term if Ministers are unable to accelerate housebuilding policies to keep up with demand.

The consequence will be even more young people unable to afford a mortgage at a time when Theresa May’s government has repeatedly said that this is its number one domestic priority.