The number of UK First Time Buyers in 2017 was 365,000 reaching an 11 year high despite an increase of the average house deposit and shortage of homes. First time buyers face the ongoing challenge of having to save a substantial deposit to take their initial step onto the property ladder. A combination of low mortgage rates, high levels of employment and Government schemes are helping first time buyers to make their first purchase. Government schemes such as ‘Help to Buy’ and the abolition of Stamp Duty on first time purchases of up to £300,000 help to reduce the upfront costs associated with stepping onto the property ladder and to stimulate purchasing growth.
In 2017, half of all property purchases with a mortgage were accounted for by first time buyers, a 7.4% increase from 2016. Whilst the average deposit has doubled and the average price increasing, the number of first time buyers has increased for the sixth continuous year. As of 2017, for the first time ever, the average home passed the £200,000 mark and the average age of a first-time buyer was recorded as 31. Prior to the recession, 2006 witnessed 402,800 buyers, which is only an 11% increase on the current figures. These statistics show a healthy movement within the property market however, increasing prices continue to present a barrier and the market remains to be competitive.
It is common for first time buyers to stay living with parents whilst saving a deposit as many parents hope for their children to one day own a home. However, it is becoming increasingly common for parents to lend their children money to put towards becoming a homeowner. Recently, the number of first time buyers who rely on their parents to provide them with inheritance or loans, has reached a historic high and is set to continue to increase, with over a third of first time buyers now turning to their family for a loan or financial gift which will help them to buy their first home. In the UK, parents are lending their children money from their savings, downsizing their own homes, taking up a second job, and even delaying retirement to ensure that their children have the funds to get onto the property ladder.
Saving for such a large house deposit proves difficult due to general living expenses and it is often a decision of whether to enjoy a social life or save for a deposit. This supports the notion that the rate of first time buyers is dependent on the robustness of the economy.
If you are thinking about purchasing your first home, Hodgkinsons’ team of Residential Conveyancers can guide you through the process. To speak to a member of the Department, contact 01754 897150. Alternatively, for more information about the services which we provide visit: www.hodgkinsons.co.uk/commerical-and-property/residential-property