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UK First Time Buyer Numbers Continue To Increase

UK First Time Buyer Numbers Continue To Increase

A recent report by Halifax reveals that the number of first time buyers in the UK increased once again in 2014, rising 22 per cent. This almost equals the 23 per cent rise recorded in 2013.

The total number of first time buyers totalled 326,500 between January and December 2014, compared with 268,500 in 2013. It is the highest total in seven years.

The share of house purchases made with a mortgage by first time buyers also rose, by 2 per cent from 2013.

This rise is due to the improving affordability of mortgages in recent years. In the last quarter of 2014 an average of 32 per cent of disposable earnings was spent on mortgage payments. This was compared to the 50 per cent back in 2007. Initiatives such as Help to Buy have contributed to a decrease in the cost of lending, with mortgage rates also dropping to record lows.

Deposits for first time buyers have also decreased in size due to the greater availability of loans requiring a relatively small deposit during the past year. However the average deposit remains 67 per cent higher than it was in 2007.

"First time buyers are vital for a properly functioning housing market. Improving economic conditions and rising employment levels have boosted confidence among those thinking about getting on to the housing ladder for the first time, contributing to the significant increase in the number of first time buyers in the past two years," said Craig McKinlay, mortgages director at the Halifax.

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