Most mortgages for first-time buyers

0
505
mortgages for first-time buyers

Despite the millennials and smashed avocado jibe suggesting mortgages for first-time buyers were decreasing.

Research from the UK’s largest mortgage lender, the Halifax shows that First-time buyers now make up the majority of home purchases bought with a mortgage in the UK.

The Halifax bank said the last time such a situation existed was way back in 1995.

In further analysis of its research the Halifax found that Pendle in Lancashire and Copeland in Cumbria were the most affordable areas, with homes costing 2.6 times local earnings on average.

An average deposit of £32,841 is required to get on the property ladder in the UK, but first-time buyers in London need, on average to find a staggering £110,656 in deposit.

The Halifax First-Time Buyer Review is based on figures from industry group UK Finance, as well as its own house price database and Office for National Statistics earnings figures.

Halifax said first-time owners in 2018 accounted for just over half of all sales with a mortgage.

There has been an overall increase in UK first-time buyers from 192,300 in 2008 to 372,000 in 2018, although in Scotland and Wales numbers have fallen, the research found.

According to the Halifax , the average price of a typical first home has jumped by 39%, from £153,030 in 2008 to £212,473 in 2018.

It said terraced houses, followed by semi-detached properties, were the first-time buyer’s home of choice over the past decade.

A first-time buyer would be close to being able to buy a home outright in the north east of England or Northern Ireland for the same money it would take to raise a deposit in the capital last year, where the average price paid by a first-time buyer was £426,857.

In north-east England the average first-time buyer home was £126,104 while in Northern Ireland it was £129,615.

In Wales a first-time buyer spent an average of £144,542 in 2018, and in Scotland it was £141,671.

First-time buyers now make up the majority of home purchases bought with a mortgage in the UK, figures show.

Russell Galley, managing director at the Halifax, said the continued growth in first-time buyers came despite a shortage of homes and the ongoing challenge of raising a deposit.

Jackie Bennett, director of mortgages at UK Finance, said competitive mortgage deals and government schemes such as Help to Buy have boosted the market for first-time buyers while new buy-to-let purchases were “dampened” by tax and regulatory changes. 

East Ayrshire in Scotland was identified as the third most affordable area, with homes at three times local gross earnings.

Brent, in north-west London, was identified as the least affordable area, with first-time buyer property prices at 13.3 times local earnings, followed by two other areas in the capital – Hackney and Newham, in east London.

Oxford was the only place outside London among the top 10 least affordable areas for first-time buyers, where average prices were nearly 11 times local earnings.

Halifax says mortgages for first time buyers at a high since 1995

The Halifax bank said the last time such a situation that mortgages for first-time buyers outpaced the rest of the UK mortgage market was way back in 1995.

Its research found Pendle in Lancashire and Copeland in Cumbria were the most affordable areas, with homes costing 2.6 times local earnings on average.

An average deposit of £32,841 is required to get on the property ladder in the UK, but first-time buyers in London need to find £110,656.

The Halifax First-Time Buyer Review is based on figures from industry group UK Finance, as well as its own house price database and Office for National Statistics earnings figures.

Halifax said first-time owners in 2018 accounted for just over half of all sales with a mortgage.

There has been an overall increase in UK first-time buyers from 192,300 in 2008 to 372,000 in 2018, although in Scotland and Wales numbers have fallen, the research found.

According to the Halifax , the average price of a typical first home has jumped by 39%, from £153,030 in 2008 to £212,473 in 2018.

It said terraced houses, followed by semi-detached properties, were the first-time buyer’s home of choice over the past decade.

A first-time buyer would be close to being able to buy a home outright in the north east of England or Northern Ireland for the same money it would take to raise a deposit in the capital last year, where the average price paid by a first-time buyer was £426,857.

In north-east England the average first-time buyer home was £126,104 while in Northern Ireland it was £129,615.

In Wales a first-time buyer spent an average of £144,542 in 2018, and in Scotland it was £141,671.

Manchester Mortgage Broker Tony Higham of Mortgage Success says that despite the portrayal in the media, young professionals, highly skilled contract workers in Finance and IT and even YouTube stars were among the mix of the more traditional full time employees applying for mortgages and that UK lenders have changed their terms in recent years to accommodate a growing trend in more people engaging in flexible and less traditional forms of self employment.

So, despite the belief that millennials are foregoing buying houses for smashed avocado on toast it seems that the reality is that younger home owners are in all likelihood actually propping up the UK property market when the doom and gloom of an uncertain Brexit future is holding the older generation back somewhat.

LEAVE A REPLY

Please enter your comment!
Please enter your name here