The number of first-time buyers of property has reached a peak in 20 years according to the latest estimates.

Despite the difficult combination of record real estate prices and uncertainty caused by last year’s third foreclosure, 2021 saw 408,379 first-time buyers.

The last time the UK experienced a peak in buyers for the first time of this magnitude was in 2002, when 531,800 took their first step on the property ladder.

According to Yorkshire Building Society, which analyzed data from UK Finance, a combination of falling unemployment, low mortgage costs and an increased number of low deposit mortgage deals available were the main factors behind. the origin of the demand for home ownership by new buyers.

And this comes despite the fact that typical first-time buyers’ accommodation rose 9% to £ 222,997 in the year through October 2021, from £ 204,230 a year earlier.

The Yorkshire Building Society said the stamp duty holiday would have helped buyers buy homes in high value-added areas such as London and the South East.

While newbies already received stamp duty relief on the first £ 300,000 of the purchase price, the additional relief on the value between £ 300,000 and £ 500,000 would have resulted in savings and savings. reduce borrowing for those who buy more expensive properties.

Lockout savings

Yorkshire also believed that many future owners may have been able to save more money during the closures which would help increase their deposits.

The proportion of household disposable income saved nationwide rose from 7% in 2019 to 27% in spring 2020, the highest since records began in 1963, the construction company said.

The English Housing Survey (EHS) suggests that first-time buyers tend to belong to high-income groups whose finances may have benefited from the Covid restrictions in this way. According to EHS, more than 60% of first-time buyers were in the top 40% of the income distribution, where data from a Bank of England survey shows that improving household finances have been the most important. more important.

Nitesh Patel, Strategic Economist at Yorkshire Building Society, said: “The performance of the first-time buyers market in 2021 has been extraordinary, especially against the backdrop of uncertainties caused by the foreclosure of the first months of the year.

“There are strong demand drivers behind the increase in volumes. Low borrowing costs are an important factor and the increased availability of more low deposit mortgages has also been a catalyst, mainly for first-time buyers. Unemployment has also fallen over the past year and the labor market has strengthened since the gradual reopening in April. “

He added: “In the short term, demand for housing will continue to exceed supply, but with prices at a high level relative to local incomes, this should dampen activity. Therefore, it is unlikely that we will continue to see a number of first-time buyers at this level in 2022 and beyond. “

Mortgages for buying a house in the UK 2006-2021

Year Number of first-time buyers Year-to-year change (%) FTB Share of all mortgage home purchases (%)
2006 400 900 ten% 37%
2007 357,600 -11% 36%
2008 191,000 -47% 38%
2009 193,900 2% 39%
2010 193,600 0% 38%
2011 188,000 -3% 39%
2012 211,900 13% 41%
2013 258,200 22% 45%
2014 310,300 20% 47%
2015 298,100 -4% 47%
2016 328,500 ten% 49%
2017 345,900 5% 50%
2018 353,100 2% 51%
2019 351,300 -1% 51%
2020 303,000 -14% 50%
2021 408,379 135% 50%

Source: UK Finance, 2021 estimated by the Yorkshire Building Society

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