Number of UK first time buyers is falling

January 20, 2016 by Brendan O'Neill

Property Market

Recent research indicates that first time buyers are still struggling to get onto the property ladder, despite a number of schemes introduced by the government to help them to buy.

According to the Halifax, the number of first time buyers in 2015 was 310,000, a reduction in comparison to the 2014 figure of 311,700 and a drop of 0.5%. Property company JLL’s head of residential research, Adam Challis, blamed the drop in numbers on

“the market reality now catching up with government policy programmes”.

The Help to Buy scheme was introduced in 2013 to help young first time buyers to purchase a property with just a 5% deposit. The government acts as guarantor for a mortgage or equity loan for the remainder of the deposit. Estate Agent, Savills believes that the scheme has limitations. The firm’s director of residential research, Lucian Cook, suggested that there may not be enough homes available in the new housing sector. This combined with young people potentially being unaware of how the housing market works, may lead to difficulties.

The report produced by the Halifax also stated that the average deposit had increased to £32,927, in comparison to the 2007 figure of £17,499. In 2015, the average price of a house also rose by 9.5%. Cook stressed that all these factors were making it more difficult for young people to get onto the property ladder, often relying on parents to help.

Seeking advice from a mortgage adviser who has had CeMAP training may help to negotiate the challenges which face first time buyers in the UK.