Agents say first time buyer numbers up despite surge in landlord purchases

The numbers of households purchasing their first home has grown by almost seven per cent annually, despite the surge in buy to let deals by landlords trying to beat the stamp duty surcharge deadline.

That’s the view of Your Move and Reeds Rains, the LSL agencies which track first time buyer activity across the market.

They say the total monthly volume of first time buyer transactions stands at 21,100, as of February, representing a rise of 6.6 per cent on the same month last year.

This is despite a dip in first time buyer property transactions between January and February this year. 

“February is a traditionally quiet period for the first-time buyer market. The month sits awkwardly between the New Year property market rush and the spring-summer activity high. However, beyond that seasonality, these figures demonstrate the strong, steady underlying growth that comes with growing first-time buyer confidence” explains Adrian Gill, the agencies’ director.

In addition, while first-time buyer property prices have risen significantly on an annual basis, mortgage lending levels have kept pace. 

In February this year, the average purchase price for a first time buyer home stood at £168,539, an increase of £21,320 – or 14.5 per cent – on February 2015’s average of £147,219. 

However, over the same 12 month period, the average size of a first-time mortgage grew from £121,534 to £139,088 – that’s an increase of 14.4 per cent.

In February the average deposit put down by a first-time buyer stood at £29,451 – an increase of 14.7 per cent, or £3,766, on an annual basis. 

This uptick has been a factor in the growing proportion of FTB income consumed by deposit costs. In November 2015, a deposit ate up just over two-thirds (67.4 per cent) of an average first-time buyer’s annual income, whereas in February of this year the average deposit consumed, on average, almost three-quarters (74.9 per cent) of their income.