The director of Your Move, part of LSL Property Services, said the market had been “firing forwards”, but the only reason why first-time buyers had been able to get their foot in the rung was because of the high loan-to-value lending on offer.
Mr Newnes said: “While the property market has been firing forwards, wage growth has been stuck in the mud of the economic recovery. Prices for first-time buyer properties have been marching steadily upwards and have now reached a new record.
“The property market has remained accessible to first-time buyers, because an increase in high LTV lending has offset rising prices.”
LSL Property Services said that house prices also rose by £5000 in the month to January, while the average first-time buyer deposit was £27,500 in January.
For the first time in seven months, first-time buyer deposits are rising as a proportion of income, as real wages stay stagnant. High LTV lending is also rising, with the average LTV for new buyers 82.3 per cent.
The data showed that first-time buyer transactions are a third higher than in January 2013, with data suggesting they will pick up further in February.
According to the data, lending to borrowers with a deposit of 15 per cent or less, typically first-time buyers, bounced back in January after the Christmas dip.
Adviser view
Simon Webster, managing director of Kent-based Facts & Figures: Chartered Financial Planners, said: “House prices have always risen but people want to own their own homes rather than rent, which they should be able to do. Thirty years ago you couldn’t get a mortgage unless you had been with your bank/mortgage lender for two years.”
| Region | Applications |
|---|---|
South East | 322,079 |
Greater London | 264,472 |
North West | 158,470 |
South West | 138,679 |
West Midlands | 114,701 |
Yorks & Humber | 109,791 |
East Midlands | 101,241 |
North | 70,339 |
Wales | 66,005 |
East Anglia | 58,943 |
England & Wales (not assigned) | 64 |
Isles of Scilly | 59 |
Total | 1,404,843 |
Source: Land Registry
