- 11th October 2019
- Posted by: DMM
- Category: Property Market Reports
The growth in first time buyers Report for August 2019 is examined by the housing portal Zoopla whom have asked the Question, ‘Can first time buyer numbers keep on rising?’
First time buyers represented the largest group of home buyers during 2018 being, according to Zoopla, some 36% of all sales. With first time buyers also expected to be the driving force again in 2019, Zoopla looked at the key drivers for the growth in first time buyers.
In recent years, Zoopla says, have been the driving force behind housing sales and have grown for 8 consecutive years, up 85% since 2010. This growth in first time buyers is expected to be driven in regional property markets that have greater affordability supported by higher loan to value mortgages.
First time buyers (FTB) where around a third of all home sales in the UK in 2018 with the governments Help to Buy scheme estimated as being 14% of purchases
Growth in First Time Buyers – Increasing across regions
Zoopla Research say “FTB numbers have been increasing across all regions except for London although the rate of increase has started to slow more recently. Numbers in London have fallen 12% since 2014, although this is a smaller decline than the 25% drop in overall sales across the London market. This partly reflects support from HTB which we estimate to account for 13% of all FTB purchases in London in 2018”.
Slower growth in FTB numbers is largely a result of affordability factors. The growth in residential values since 2013 has not been uniform. In areas where prices have grown rapidly the income required to buy, and deposit levels, are relatively high. In areas where price growth has been more modest, affordability levels remain less of a constraint on demand.
We estimate that the household income required to purchase a typical (2-3 bed) FTB priced property (10%-15% lower than an average home) ranges from £35,000 in the North to £75,000 in London
For anyone involved in the property industry, this is a fascinating report that goes into the detail of loan to income caps, affordability stress testing, the effects of longer term mortgages and FTB stamp duty relief. You can read about the growth in first time buyers in the full Zoopla Research Report here.
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