Despite the uncertainties created by the lockdown in 2021, over 400,000 people have stepped onto the property ladder this year, the highest number in 20 years, according to Zoopla’s latest House Price Index. *
The number of first-time buyers has increased by 35%** according to the Financial Reporter, and recent data shows that those who have taken their first step onto the property ladder now account for half of all mortgaged house purchases, highlighting how fruitful the market is currently.
Figures this year have nearly doubled since just after the 2007 global financial crisis, showing that buyers have not been deterred by increasing house prices, which have increased by 9% to £222,997. ***
What has prompted the increase in first-time buyers?
The Yorkshire Building Society says high employment levels, low borrowing costs, and an increased number of low deposit mortgage deals are key drivers of current demand. Many mortgage deals were pulled by banks and building societies in 2020, due to the pandemic. However, buyer confidence has been restored by the government-backed mortgage guarantee scheme, encouraging a further increase in buyers.
There are currently more than 350 mortgage deals available to buyers who want to borrow up to 95% of their home’s value, according to the Financial Reporter**. With interest rates at an all-time low, now is a better time than ever to think about climbing the property ladder.
Additionally, first-time buyers have been able to benefit from a range of government schemes, such as the "help to buy" scheme, which offers an equity loan to new buyers.
The stamp duty holiday has also made it easier for first-time buyers to increase the size of their deposits. They can already take advantage of stamp duty relief on the first £300,000 of the house price, but additional relief on the amount between £300,000 and £500,000 will have resulted in higher savings and reduced borrowing, which further benefits new buyers in high-value areas such as London and the Southeast.
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*According to Zoopla’s latest House Price Index
**Financial Reporter: ‘Number of first-time buyers hits 20 year high’
*** Property Data statistics