First-time buyer numbers peak

There were an estimated 144,500 first- time buyers in the first six months of 2014, an increase of 25% on the same period last year – and also the highest total for the same six months period since 2007 (181,500).

For the third successive year the number of first-time buyers, in the first half of the year, has been over 100,000, representing the strongest performance, for this period, since the start of the financial crisis

First-time buyer numbers also rose by more than the total number of homemovers (20% over the same period), increasing their share of the home purchase market from 44% in the first half of 2013 to 46% in the same period this year. This was the highest proportion since 2000.

Mortgage affordability has also improved significantly in recent years. The proportion of disposable earnings devoted to mortgage payments by first-time buyers stood at 31% in the first half of 2014; substantially below of the peak level of 47% in H1 2007 and below the long-term average of 34%.

Craig McKinlay, mortgages director at Halifax, said: “First-time buyers are an important segment on the housing market, accounting for 46% of home purchases in the first six months of the year – up from 44% during the same period in 2013 and 40% in 2012.

“The resurgence in the number of first-time buyers getting on to the housing ladder has been buoyed by improving economic conditions, rising employment levels as well as government schemes such as Help to Buy, which have helped more first-time buyers on to the housing ladder."

Almost two-thirds (60%) of all first-time buyer purchases in the first half of 2014 were above the £125,000 stamp duty threshold, this is up from 51% a year earlier.

Nationally almost half (48%) of home purchases by first-time buyers were between £125,000 and £250,000, up from 44% from a year earlier.

However, there were significant regional variations in the prices paid by first-time buyers, with those in London (1%), the South East (10 %) and South West (23%) not paying any stamp duty where the purchase price is below the £125,000 threshold.

In contrast, nearly three-quarters (72%) of first-time buyers in the North bought a home below the lowest threshold, and therefore paid no stamp duty.