First-time home buyers hit 10-year high – BBC News

First-time home buyers hit 10-year high – BBC News

Posted by John P. Bradford // January 13, 2017

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There were more first-time home buyers in 2016 than at any time since the start of the financial crisis, according to research by Halifax bank.

It also found the average price of a first home in the UK broke through the 200,000 barrier for the first time.

Meanwhile, the average first-time deposit more than doubled compared with 2007 to stand at more than 32,000.

And 60% of first first-time buyers’ mortgages were for 25 years or longer, up from 36% a decade ago.

The Halifax First-Time Buyer Review said the number of buyers entering the market hit 335,750 last year, up 7.3% on 2015.

That is the highest level since the start of the financial crisis in 2007, and 75% higher than the all-time low of 192,300 first-time purchases seen in 2008.

However, it still has some way to go to match the peak of 402,800 in 2006.

Longer mortgage terms

The average first-time deposit across the UK as a whole a decade ago was 15,168. It had increased 113% by last year to 32,321.

Rising property prices mean first-time buyers are increasingly taking out longer mortgages.

Last year 60% of first-time buyers took out a mortgage of 25 years or longer. More than a quarter (28%) took out a 30 to 35-year term mortgage.

Ten years ago only 36% of people getting on to the first rung of the property ladder borrowed for longer than 25 years. Nearly two thirds (64%) of first-time buyers took out a mortgage for between five and 25 years.

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However, there are massive regional variations.

While the average price paid by a first-time buyer across the UK as a whole in 2016 was a record 205,170, in London it was nearly double that at 402,692, which was another all-time high.

In the least expensive region, Northern Ireland, the average cost of a first property was 115,269.

The average deposit paid in Northern Ireland has fallen by a fifth in a decade to 16,695, the lowest in the UK.

Meanwhile the average deposit in London has shot up over that time by 276% to 100,445.

Halifax housing economist Martin Ellis attributed the increase in first-time buyer numbers to continuing low mortgage rates and high levels of employment which had “supported the market”.

“Government schemes such as Help to Buy have improved affordability, enabling more first-time buyers to buy their own property,” he added.

Read more: http://www.bbc.co.uk/news/business-38605479