Are you thinking about purchasing your first property? Worried you might struggle to get on the ladder?
We have good news for you. The number of first-time buyers has rocketed to the highest levels in ten years.
In 2017, it’s estimated that a whopping 359,900 people bought their first property. This is fantastic news for first-time buyers, but why are things on the up?
Since the last boom in house sales in 2006, there have been changes to how people approach homeownership. People are stretching out their mortgage loans for longer. In 2016, 56% of mortgage terms were extendedto 25 to 35 years – an 18% increase since 2007. Longer loans mean payments can be cheaper, but over a longer period. This can make mortgages more manageable and affordable for first-time owners.
Low mortgage rates and high-levels of employment across the UK have also helped first-time buyers make the big step. As have government schemes like Help to Buy, which was introduced in 2013. Housing economist, Martin Ellis, says that this increase has reached “a level of momentum not seen since before the financial crisis”.
First-time buyers now make up half of house purchases, which has rose from 36%a decade ago. This is despite the cost of deposits increasing by 91%, according to Halifax. Russell Galley, Managing Director at Halifax, says this “flow of new buyers … is vital for the overall wellbeing of the UK housing market.”
Hopefully, yes. Things could actually get even better!
The average age of first-buyers has increased from 29 to 31, meaning that younger people are still hesitant to go all in on home owning. However, the introduction of the new Help to Save government scheme could change this trend.
The scheme intends to specifically help working people on low incomes build up their savings with government backing. For younger people, who are starting to think about their long-term property plans, this is great news.
The recent scrap of stamp duty for first time buyers on property up to £300,000 means there’s one less barrier for homeownership. Chancellor Phillip Hammond says it could “abolish it altogether for 80%” of first-time buyers.
And if that wasn’t enough to persuade first time buyers to take the plunge, UK house prices have recently dropped too.
Here at Weale and Hitchen we are more than happy to discuss your options with you. We are an independent estate agency with lots of local property knowledge and our friendly team of experts can help you today. Get in touch or visit one of our five branches in either Bury, Holcombe Brook, Ramsbottom, Harwood or Rawtenstall.
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