This was a 30% rise on the previous year and represented a population of 390,000 new homeowners, analysis from Savills found.
According to Savills, first-time buyers made up a fifth of all spending in the UK housing market in the 12 months to September. This was the highest share since at least 2007, based on data from the Bank of England, HMRC, the Land Registry and its counterparts in other parts of the UK.
Homeownership is ‘more accessible’
Lucian Cook, head of residential research at Savills, said: “Record lending to first-time buyers partly reflects the rush to get things through prior to the end of the stamp duty holiday earlier in the year.
“At the same time, homeownership is more accessible now than at any point in the last three years, thanks to lower borrowing costs, lower real house prices, and more accessible mortgage debt. The Financial Conduct Authority’s revised guidance on interpretation of mortgage regulation back in March, in particular, gave lenders more latitude to lend at higher loan-to-income and loan-to-value ratios, to the benefit of first-time buyers.”
Aldermore Insights with Jon Cooper: Edition 5 – Feeling enthusiastic about next year’s run-of-the-mill market
Sponsored by Aldermore
First-time buyers put down deposits of £21.8bn during this period, less than the total of £25.9bn in the same period in 2021.
Savills said this showed that cash buyers, with an estimated population of 397,000, made up the largest share of the market, valued at £147.6bn. However, this decreased by 3% over the year.
UK housing market valued at £417bn
In the year to September, the value of the UK housing market increased 14% year-on-year to £417bn. Savills said that although there was more activity, this was lower than the record of £521bn in the year to September 2021.
Cook said: “Further interest rate cuts expected later this year are likely to broaden the pool of prospective buyers entering the market in 2026.
“The continued shortage of rental properties is set to keep first-time buyer demand strong going into the new year. Meanwhile, existing mortgage holders seeking to move home are also expected to become gradually more active, with falling rates enabling them to take on slightly larger loans and increase their budgets.”
