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Positive news for Hampshire property market as first time buyer figures rise for first time in 10 years

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Signs of the recovery of the UK property market were proven once again today as new figures show the number of first time buyers in 2016 reached its highest level since the start of the financial crisis in 2007.  Sarah Brooks, Residential Conveyancing Partner, here reviews the news across the UK as well as here in the South.

Record first time buyer figures

The Halifax First-Time Buyer Review shows that the number of first-time buyers hit 335,750 last year, up 7.3% compared to 2015.  “In 2007 this figure was 359,900, so while last year was slightly below this, it marks the third consecutive year that the figure has topped 300,000,” explained Sarah.  “We have a way to go to meet the peak of 2006 with 402,800 first-time buyers, but the fact that this is the highest figure since 2007 is extremely positive, especially when compared to the all-time low of 2008 when there were just 192,300 first-time buyers entering the market.”

First time buyer mortgages

As well as the increase in first-time buyers is also the increase in house prices as the market becomes more stable.  “The average price for a home for first-time buyers surpassed £200,000 for the first time, equating to an average of £205,170,” continues Sarah.  “This is 7% higher than in 2015, and has also let to first-time buyers taking out longer mortgages.”

The Halifax review shows that in 2016, 60% of first-time buyer mortgages were for 25 years or longer, up from 36% a decade ago.  The preference in 2007 was a mortgage between five and 25 years, whereas the review shows more people are looking for longer mortgages, as 28% took out a 30 to 35-year term mortgage.

“There are of course regional differences across the UK concerning house prices, and not surprisingly it is London than has the most expensive prices for a first-time buyer, sitting at approximately £400,000,” continues Sarah.  “This is more than double than here in the South East, which is the next most expensive region.  According to the same Halifax report conducted in July 2016 the average house cost £257,481 in the South East.”

Housing deposit

“With rising house prices also comes a rise in the deposit required,” continues Sarah.  “In London, the average deposit was 25% equating to £100,445, whereas elsewhere across the UK it was 16%.  This means an average deposit for first-time buyers across the UK of £32,000, compared to £15,168 in 2007.  For the South East, the July 2016 Halifax review has the average deposit in the South East as £47,415.”

First-time buyers need to consider that other associated costs have also changed in the last decade.  More first-time buyers now must consider stamp duty costs as less than a third of purchases in 2016 were below the £125,000 stamp duty threshold, compared to 45% in 2013.

“There are many reasons to explain the increase seen last year,” concludes Sarah.  “Government schemes such as Help to Buy, which has now ceased, helped many people take that first step, as well as low mortgage rates and the increase in levels of employment giving people more income to raise that important deposit and make repayments.  We’re also finding at Warner Goodman that confidence is returning in general to the Hampshire property market, something that we hope to see continuing as we move through 2017.”

Halifax used a range of sources for their report, including their own housing statistics database and figures from the Council of Mortgage Lenders and Office for National Statistics.

If you’re a first time buyer looking to step onto the property ladder you can see our tips for fist time buyers, or contact our Residential Property teams at conveyancingquote@warnergoodman.co.uk.

ENDS

This is for information purposes only and is no substitute for, and should not be interpreted as, legal advice.  All content was correct at the time of publishing and we cannot be held responsible for any changes that may invalidate this article.