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First-time buyer transactions jump nearly 24%

  • 05/01/2016
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First-time buyer transactions jump nearly 24%
Completed first-time buyer transactions increased by 23.7% in the year to November 2015, the highest figure since August 2007.

November saw 31,300 transactions, 6,000 higher than November 2014, figures from estate agents Your Move & Reeds Rains First Time Buyer Tracker show.

“There are a number of factors behind these solid figures. The effect of government stimulus packages, such as the Help to Buy scheme, is one factor, while the lure of lower interest, higher LTV lending is another,” said Adrian Gill, director of Your Move and Reeds Rains.

He added that perhaps the most important factor is that over 2015, first-time buyers have become increasingly cost-savvy, doing their research and weeding out the best value-for-money properties in their desired areas.

The cost of buying a first home has dropped by 4.7% to £148,385 in the year to November 2015.

In contrast, the rest of the market has seen prices increase by 6% to £290,640.

The average first-time buyer now has a deposit of £24,598 and pays an 18.6% proportion of their income on their mortgage.

Gill said rising real-terms wages have been instrumental in helping first-time buyers pay a smaller percentage of their salary on mortgage payments and deposit costs.

“These were obstacles that were previously holding many back from taking the plunge and buying their first home. Equally, a more fluid mortgage market has given many first-time buyers the chance to own a home off the back of a mortgage that two or three years ago they could only dream of obtaining.”

He said the question for the year will be whether first-time buyers can continue ‘playing hard-ball’ with a smaller housing stock, as well as contend with less favourable mortgage deals as the Bank of England creeps closer to an interest rate rise.

Yesterday, the National Association of Estate Agents (NAEA) reported a 10% decrease in sales made to first-time buyers.

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