The number of first-time buyers increased by nearly a fifth in the first six months of 2013 according to figures from mortgage lender Halifax.
120,000 people bought their first home between January and the end of June. This is the highest number since the first six months of 2007 when there were 181,500 first-time buyers.
This continues a trend of growing numbers of first-time buyers – there was a 13% increase between 2011 and 2012.
The increase in first-time buyer numbers may be down to an increasing number of high loan-to-value mortgages coming onto the market. Mortgage rates have also been falling over the past year, although not significantly for people with small deposits.
Many first-time buyers are also buying with financial assistance, often from their parents. The Council of Mortgage Lenders estimates that about two thirds of first-time buyers had financial assistance in 2012.
Many first-time buyers still struggling
However, getting onto the property ladder still remains a challenge for many people with house prices at a long-term high when compared with average earnings.
The average property price paid by a first-time buyer in the second six months of 2013 was 4.26 times average gross annual earnings – compared with an average of 3.23 over the past 30 years.
If you’re looking to buy your first home and would like help, the Which? first-time buyer hub has information about everything you need to know from finding the right property through to getting a mortgage and managing the legal process.
It also continues to be difficult for people to save up a big enough deposit. The average first-time buyer deposit currently stands at 18%. Unsurprisingly, buyers in London have to save up the most, £60,747 on average compared to £13,526 in the North of England.
Halifax also found that a fifth (21%) of non-homeowners aged 20-45 have already given up on the prospect of owning a property.
Increase in Stamp Duty payments
High property prices also mean that an increasing number of buyers are paying Stamp Duty when purchasing their first property
Over half (51%) of their purchases in the first half of 2013 were above the £125,000 Stamp Duty threshold, this is up from 44% a year earlier. In London more than one in three first-time buyers in the capital paid more than £250,000, resulting in them being liable to duties of more than 1%.
- Buying a property step by step – the different stages you need to go through when buying your first house
- How to get the best mortgage deal – make sure you get the right mortgage for you
- How big a deposit do I need? – find out how much you should save for a property