Despite current uncertainty with the UK housing market, the number of first-time homeowners continues to grow in the last few years. High-street banks have currently been offering the lowest mortgage rates to first-time buyers since Bank of England records began in 1995.
The average first-time buyer taking out a mortgage was aged 31 and had an annual household income – either one individual or jointly as a couple – of £42,000, UK Finance said.
Frances Clacy, analyst at Savills, said the number of first-time buyers has been rising steadily since 2012/3, with the help of government policies such as the Help-to-Buy equity loan scheme.
Over 43,100 first time buyers taking out new mortgages by Jan 2020
In December 1995, the Bank of England began keeping records on average mortgage rates in the UK and we anticipate that the low rates for first-time buyers will continue throughout the year.
“Recent market analysis shows that first-time buyer levels have increased. In London, the levels for first-time buyers have reached their highest rate since 2015.” Source: UK Finance
The current decrease in mortgage rates has been caused by a number of factors. Banks are attempting to offer attractive mortgage rates that can appeal to new borrowers. Because of this, mortgage rates are likely to decrease further in 2019.
First-time buyers continued to use the popular government Help to Buy scheme. Recent government statistics show that 81% of first-time buyers used the Help to Buy scheme to get onto the property ladder.
Over 420,500 people bought a home using Help to Buy, with 365,000 a first-time buyer. The average price paid through the scheme was £172,449 however the average price for a first-time buyer purchasing a home was considerably higher at £189,239.
For property developers, these are encouraging signs as more first-time buyers continue to grow and use a range of government schemes within Help to Buy. With Help to Buy Equity loan, the government can help lend 20% of the value of the property you want to buy as an equity loan. Read more.
“We’re helping a new generation of first-time buyers realise their dream of owning a home. Help to Buy continues to be hugely popular across the UK, with 420,000 people getting support so far.” John Glen, Economic Secretary to the Treasury
With development finance, Hunter Finance can help provide you with flexible, instant finance to help get your property development started. We offer secure, development finance that can cover 100% build cost and 60% land purchase. We provide property loans of up to £2.5m. Apply today.
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