First time buyer numbers still 11% below pre-recession levels

The proportion of first time buyers in the market is still 11 per cent below the level seen before the 2008 downturn according to property expert Kate Faulkner.

Analysis by her Property Checklists consultancy shows that this nonetheless shows a substantial recovery in FTB numbers thanks to the improving economy and Help To Buy, which last year was used to purchase some 32,000 homes - 80 per cent of these were for first timers.

“For those critical of the scheme, the loss of H2B could result in a fall in FTBs and, worse still, a decline in their interest in new builds” says Faulkner. 

“In my view [this] would not be good news for the industry but more importantly for those who are trying hard to save with Help to Buy and Lifetime ISAs and the new build scheme” she adds.

Faulkner urges people to be wary of some of data and claims made in the recent first time buyer reports, which may have exaggerated FTB involvement in the market. 

“For example one of the key reasons for FTBs being a higher proportion of house purchase loans is because more people own their home outright and paying down their mortgages, while others are moving and buying with cash, so this is a natural increase mainly due to the ageing population and the baby boomers paying off their mortgages” she says.

Faulkner points out that many purchasers get their first home for under £150,000 in Scotland, Northern Ireland, Wales, Yorkshire, the North East and the West of England, while in the Midlands it's just under £160,000. 

Affordability issues really start 'biting' in areas such as London, the South and East of England where the price paid suddenly jumps to around £250,000 or over £400,000 in London, she says.

However, she says its important not to over-emphasise specific figures and in particular references to the average paid by FTBs, or ‘what they need’ to secure a home which - Faulkner believes - can deter buyers in some circumstances. 

“For someone buying in an area where the 'average' FTB pays £156,547 in the East Midlands and finds £24,462 for a deposit, this is just what it says it is – an average. People are buying for a lot less and also putting down five to 10 per cent deposits, which would be around £5,000 to £10,000 - a lot less than the £24,462 FTBs are putting down” she concludes.