Number of First-Time Buyers in the UK Reaches an All-Time High

According to figures from UK Finance, the number of first-time buyers who are getting their foot on the bottom of the property ladder has reached a 12 year high. 

The report looked at figures for 2018 and showed that 370,000 people applied for their first mortgage, an increase of 1.9% on the previous year and the highest number since 2006 when there were 402,800 applications.

New lending

The report also showed that there was some £62 billion in new lending during 2018, an increase of almost 5% on the same period the previous year.  Schemes such as the Help to Buy scheme from the government means that more people than ever are in a position to buy their first home, without always having to have a massive deposit.

New buy to let mortgages stood at 5,100 but this has actually fallen on previous years, by around 5%.  This shows that the market has become a little cautious in the light of new tax rules and other regulations being put in place for landlords.

First home success

With 370,000 new first-time buyer applications, this is the highest number in a 12 month period for 12 years, showing that while there are concerns about the housing market, there are still plenty of positive signs.  This works out as around 35,000 first time buyers a month that are moving into position to buy their first home.

The report also showed that the average age of the first time buyer was 30 and their gross household income was £42,000.

Getting that first mortgage

The increase in numbers is a positive sign but there are still considerations for first-time buyers, and this is why that average age is around 30.  For starters, you need to have a deposit of between 5-20% of the cost of the home before you attempt to get a mortgage.  So if you are looking at a property worth £150,000, you will need at least £7500 in a deposit.   The more deposit you have, the more mortgage products are open to you.

Deposit isn’t everything, you also need to factor in other costs.  Buying your first home still involves some costs that can be quite substantial and include:

  • Solicitors fees
  • Survey Costs
  • Removal costs
  • Building insurance
  • Furnishing and decorating costs
  • Mortgage arrangement and valuation fees

There’s no Stamp Duty to pay on your first property up to a value of £300,000, as long as it isn’t worth more than £500,000.

Monthly repayments

After the problems of the Financial Crisis, lenders are also a lot more cautious about ensuring you can afford your mortgage payments and still pay all of your other living costs before they commit to giving you the money.

It can be an idea to put together a budget before you start mortgage shopping that looks at your outgoings.  This can be things like food, utility bills, council tax, water rates and also any existing debt you might have.   You will need to provide proof of income and outgoings to show the mortgage company that these figures are accurate.

You may qualify for a home buyer scheme backed by the government and a mortgage broker will be able to tell you about that.  There are affordable housing schemes, shared ownership schemes and also the Help to Buy scheme that could all make the difference between getting that house or not.

Finding the right deal

There’s a lot involved with finding the right mortgage deal and that’s why many first time buyers now use a mortgage broker.  They aren’t tied to specific companies and can find a product that suits your circumstances and budget.  That way, more people can continue to become first-time property owners in 2019.

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