This month was the lowest May for first-time buyer completions in three years, according to the latest first-time buyer tracker from Your Move and Reeds Rains.
In May, the average deposit set a first-time buyer back £25,134, up 1.7% on the previous month and 4.2% on a year ago, while the average deposit as a proportion of income is also on the rise for first time in four months to 64.4%.
First-time buyer sales stood at 22,000 in May, 18.1% lower than May 2014’s figure of 27,100 and 0.9% lower than April when 22,400 first-time buyer sales were completed. While May saw significantly more first-timer buyer sales than February of 19,100, the report pointed out this represented a seasonally quiet time of year.
Adrian Gill, director of estate agents Your Move and Reeds Rains, said uncertainty surrounding the general election in the run-up to May meant many first-time buyers held off purchasing a property.
“A second and more permanent root to the disappointing first-time buyer figures is the challenge of cultivating a deposit. Many first-time buyers are still on tight monthly incomes, struggling to save while savings rates stay so low. Meanwhile, deposits are rising primarily as property prices continue their seemingly unstoppable upwards march,” he said.
Buyers paying for their first home spent more on average in May than in April, with the average price of a first home up 0.3% on a monthly basis to £153,348, 6.7% higher than a year ago. May’s average house price is the highest average recorded in 2015 so far.
Gill added: “While buyers may grumble, rising property prices are a positive sign. They demonstrate that the continuing fall in the average mortgage rate combined with the brightening economic outlook has left plenty of demand in the first-time buyer housing market. This is despite May’s threat of a highly uncertain election outcome.”
