January 2, 2020 12:01:00 AM
The number of people taking their first step on the property ladder is estimated to have reached its highest levels since 2007 last year.
Across the UK, there were 353,436 first-time buyers in 2019, slightly up from the 353,130 recorded in 2018 and the highest annual total since 357,590 in 2007, according to calculations from Yorkshire Building Society.
But there is still some way to go before first-time buyer numbers reach 2006 levels, when the annual total stood at 400,870.
The society used industry-wide mortgage data from trade association UK Finance up to October 2019 and estimates for November and December 2019 to calculate the total number of first-time buyers last year.
Nearly twice as many first-time buyers secured a mortgage in 2019 as at the start of the financial crisis in 2008 (191,040), with those entering the property market now accounting for more than half (51%) of homes purchased with a mortgage. In 2008 this share was just 38%.
Yorkshire Building Society strategic economist Nitesh Patel said: “Even though the number of first-time buyers has stayed pretty much the same as last year, it is still encouraging to see first-time buyers top 350,000 for the second year in a row.
“They also represent over half of all homes bought with a mortgage, meaning the first-time buyer mortgage market share is at its highest since 1995, when they bought 53% of all mortgage-financed homes.”
He continued: “In recent years first-time buyers have been helped by strong competition driving mortgage rates down to near-record lows, making borrowing more accessible…
“Also government schemes such as stamp duty relief, Help to Buy equity loans and Help to Buy Isas will have made an impact.
“This combination of factors has made buying a home more accessible in recent years.
“This has seen the first-time buyer market bounce back from the financial crisis and perform better than other sectors, such as the home-moving and buy-to-let markets.
“However, as these figures show, the market may have now reached its peak and buying your first home still remains tough for many.”
Here are Yorkshire Building Society’s tips for first-time buyers:
1. Before you start looking at properties, review your personal finances.
If you are concerned about your current monthly outgoings, try to reduce these at least six months before making a mortgage application.
It is a good idea to check your credit report and make sure all the information shown is correct, before applying for a mortgage.
Make sure you appear on the electoral roll for your current address and check any records of loans and credit cards.
2. Once you are happy with your finances, try out a mortgage cost calculator, available on mortgage lender or independent money advice websites.
This is an easy way to help you work out what you can afford and how much you would be able to borrow.
Factor in any deposit saved (usually at least 5% to 10% of the purchase price as a minimum) as well as legal and survey costs.
3. Consider speaking to a mortgage adviser or broker.
A mortgage adviser will look at your income, any debts you have and your deposit to make an assessment on how much you can borrow.
They will also help explain how a mortgage works and the things you need to consider before buying your first home.
It is important to do this at the start of your house hunt, so your search is realistic.
Getting a mortgage offer in principle would show sellers that your finances are already in place, making you an attractive buyer.
4. When choosing where to live, make a list of what is important to you.
Consider the number of bedrooms, parking and outdoor space – and whether location is more important than the property.
It may be key to look at local amenities such as schools, shops and transport links too.
5. Remember that house purchases rarely stick to the expected timeframes.
This will probably be one of the biggest financial commitments you will make in your lifetime, so it needs careful consideration.