Waterfords have discovered that there were 75% more first time buyers in 2016 than in 2011. So what are the reasons behind this and what does it mean for the property market?
First of all, a big factor that has pushed first time buyers to climb onto the ladder is the improvement in Government schemes aimed at helping first time buyers along with continued low mortgage rates and growing employment.
First time buyers are still having to find less-traditional and creative ways of getting their foot on the property ladder. The English Housing Survey estimates that 29% of first time buyers had help towards their deposits from family and friends.
Since 2011 the number of loans to first time buyers has increased by over 75% while, in the last year alone, over 339,000 loans were issued to those buying their first home according to the Council of Mortgage Lenders. In 2016, first time buyers comprised 42% of all mortgage loans issued for house purchase (i.e. not including re-mortgaging). This is up from 34% in 2011.
What does this mean for the property market moving forward?
This unexpected increased first-time buyer activity is excellent news for the entire property market. If first-time buyers are still managing to scramble onto the bottom of the property ladder then more people will be able to upsize, increasing overall market activity.
However, 40% of first time buyers secured their property with an initial mortgage term of over 30 years. With the average age of first time buyers being 32, home owners will be paying off their mortgage debt well into their 60s. The ability of these home owners to assist their own children in getting a foot on the ladder in later years could be impeded if they are still paying off their own mortgage.
In the short term, this huge increase in first time buyer activity can only benefit the property market but with the methods of securing a deposit often reliant on other means and mortgages lasting until after retirement, the next generation will have to get even more creative when it comes to getting their first foot on the ladder.
Are you a first time buyer or currently saving for a deposit? Contact our friendly team who will be able to answer any questions you might have about your upcoming purchase. We can also arrange a free, no-obligation financial advice appointment to discuss your options.
Take a look at Waterfords properties currently on the market and if you need any advice on your move, contact us and we will be more than happy to advise. Our advice is free and without obligation.