FTB mortgage activity continues to pick up

FTB mortgage activity continues to pick up

First-time buyers accounted for 47 per cent of all mortgage-financed house purchases in the first half of the year, despite a very modest decline in their numbers, Craig McKinlay has said.

Halifax’s mortgages director said the fall had been in line with the general softening in market activity and the road ahead looked positive.

There were an estimated 139,500 FTBs in the first half of 2015, according to the Halifax first-time buyer review – a 7 per cent reduction year-on-year and the first decrease since the first half of 2011.

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However, the number of FTBs increased more rapidly than the number of subsequent buyers over the past few years, from 38 per cent in 2011 to 47 per cent in 2015.

Key findings

The average price paid by FTBs increased by 8 per cent over the past year from £165,829 to £178,370.

The average price paid by first-time buyers was the highest in Greater London, at £342,313; more than £100,000 higher than the next most expensive region, the South East, at £225,383.

Northern Ireland was the least expensive region for a FTB, with an average price of £104,240.

The average deposit, as a proportion of the purchase price, fell from 20 per cent in 2013 to 17 per cent in 2015, according to the review.

Buyers in Greater London put down the largest average deposit, at £81,680, while in Northern Ireland FTBs put down the smallest average deposit, at £16,011.

Stephen Smith, director of L&G mortgage club, said a slowdown in house price inflation had been good news for those looking to get on the property ladder, but added: “Prices are climbing well above the level of inflation, which is making it difficult for aspiring homeowners.

“To reduce house price inflation and make homes more affordable, we need an extra 250,000 homes a year so that there are enough properties for people to buy.”

Adviser View

Jane King, mortgage adviser at London-based Ash-Ridge Private Finance, said: “Figures need to be treated with a pinch of salt. Affordability rules, and lenders’ rigid interpretation of FCA rules, has meant those wanting to move up are unable to and are restricted because of age.

“They are unable to get the finance because of draconian rules around taking mortgages into retirement. This is not represented in the figures so you can say they are a little skewered.”