The rise of the first-time buyer - is this the return of generation buy?

There are more first-time buyers (FTBs) finding a way on to the property ladder than at any time since the Financial Crisis in 2008. 

Since 2011, the number of loans to this group has risen by over 75% and, in the last year, over 339,000 loans were issued to FTBs, according to the Council of Mortgage Lenders. 

In 2016, 42% of all mortgage loans issued for house purchases (i.e. not including re-mortgaging), were to FTBs, up from 34% in 2011 and 30% in 2007 - before the Global Financial Crisis put the squeeze on borrowing across the board.

Government policies aimed at helping first-time buyers have no doubt helped to boost numbers, as have persistently low interest rates and rising employment.

Despite government support, however, these young (and not so young) buyers are still having to find less-traditional ways to raise their share of the equity. The latest English Housing Survey estimates that 29% of first-time buyers had help towards their deposits from family and friends - the so called ‘Bank of Mum and Dad’ has grown in recent years. 

Another way to spread the burden is by extending the period of the loan and 40% of first-time buyers secured their property with an initial mortgage term of over 30 years. With the average age of first-time buyers at 32, many of these home owners will be paying off mortgage debt well into their 60s – which could impede their ability to help their own children at some date in the future, if they are still paying off debt of their own.

The average price paid by a first-time buyer for a home in England in January 2017 was £196,459, according to the Land Registry. This is 6.2% higher than a year earlier. Those hoping to get their first foot on the ladder may need to act quickly in some areas as average house prices rise faster than they can accumulate a deposit. Some of the steepest rates of annual growth for first-time buyers are currently in Bedford. 

Take a look at our latest Local Area Profile for Bedford to see more highly localised housing market analysis. 

The information in all our Local Market Profiles is powered by Dataloft Inform, an automated analytics system that delivers local market intelligence, online, in fine-grained detail. Dataloft Inform has something in the order of 140 chart permutations for every local area across England and Wales as well as key statistics, infographics and insightful commentary – instantly and at a fraction of the cost of a bespoke market report.

*This article was compiled by Dataloft Senior Research Analyst Anna Zaccaria

**Dataloft are a team of top property industry analysts - they see the story in statistics.