First-time buyer sales rose seven per cent year-on-year in August, despite growing concerns over a rate rise and falling incomes, according to research from Your Move and Reeds Rains.
Interest rate rises pushing up mortgage repayments was named as the number one concern putting off prospective homebuyers from purchasing property by 15 per cent of first-timers in August, compared to 12 per cent a year ago.
Worries over decreasing income was cited as the biggest block to homeownership by 11 per cent of first-time buyers, more than double the 5 per cent a year ago.
There were 28,300 first-time buyer completions last month, 7.2 per cent than the same period a year ago, and the third consecutive month in which first-time buyer completions topped 28,000.
Compared to July, first-time buyer completions dipped 6.3 per cent, however monthly volumes remained 9.3 per cent above the 25,900 average figure for this year to date.
David Newnes, director of estate agents Your Move and Reeds Rains, said that first-time buyers keen to get a foot on the housing ladder are essential to keep the housing market moving.
“For seven years, a whole host of new buyers were unable to access the property market, as wages remained stagnant while the cost of living grew making saving for deposits difficult for many.
“But Help to Buy – and the whole host of other higher loan-to-value options now being offered by lenders – have been helping repair the damage caused by the financial crisis, and providing a means for first-timers to get onto the ladder at long last.”
Higher LTV lending encouraged by Help to Buy meant the average first-time buyer deposit fell 6 per cent year-on-year to £27,114 in August.
The latest E.surv mortgage monitor showed higher LTV lending continues growing, with 11,300 loans to borrowers with a deposit worth 15 per cent or less of the total value of their property in August, accounting for 17.8 per cent of all house purchase lending; the highest proportion since October 2008.
The average first-time buyer in London paid £272,183 for their property in the three months to August 2014, compared to £144,657 across the UK, while capital-based first-timers also had an average buyer deposit of £71,309 in the three months to August.
This was more than double the average deposit in the South East (£32,983) and four times larger than in Northern Ireland (£15,835).
LSL uses monthly data from registered first-time buyers in its estate agency brands Your Move and Reeds Rains to.
