Number of first-time UK home buyers at highest level: Survey
19 Jul 2014
The number of first-time home buyers in the UK is at its highest level since the start of the financial crisis in the first half of 2014, helped by the recovering economy and policies such as Help to Buy, a survey revealed today, Reuters reported.
First-time buyers made up 46 per cent of all buyers between January and June, the highest proportion since 2000, with their number rising by 25 per cent to an estimated 144,500, mortgage lender Halifax reported.
UK finance minister George Osborne launched the Help to Buy mortgage guarantee scheme last year, saying he wanted to help would-be home-buyers who were not able to pay large deposits, particularly first-time buyers.
According to critics of the plan, it risked pushing up prices and would not do much to spur new home-building.
According to the International Monetary Fund's statement in June, Help to Buy might need to be scrapped if it grew a lot and added to risks of a housing bubble in the UK.
According to an official release in May, Help to Buy accounted for only a fraction of mortgages in the early months of 2014 but the existence of the program was believed to have boosted high-deposit lending more generally.
While the number of new buyers had risen, they were spending less on mortgage repayments, according to the report. First-time homeowners spent 31 per cent of their monthly disposable income paying off mortgages, as against a peak of 47 per cent in the first half of 2007, Halifax said, Bloomberg reported.
Bank of England officials initiated reining in of mortgage lending to prevent an unsustainable build up of consumer debt after record-low interest rates and government incentives raised the prospect of a bubble.
BOE governor Mark Carney had said the housing market posed the biggest threat to UK's recovery.
The resurgence in the number of first-time buyers getting on to the housing ladder had been buoyed by improving economic conditions, rising employment levels as well as government schemes, Craig McKinlay, a mortgages director at Halifax said, Bloomberg reported.
They accounted for 46 per cent of all home purchases in the first half, he added.
The report today also showed how prices varied regionally, with first-time buyers paying £306,354 for a property in London and £110,410 in the North.
The average age of new homeowners was 32 years in London, as against 28 years in Wales and the North.
