First-time buyer numbers rose 15 per cent in April, due partly to record low rates and a wider choice of mortgages, according to figures from LSL Property Services.
There were 22,000 first-time buyer transactions in April, compared to 19,100 in March. The average price of property bought by first-time buyers rose two per cent in April, to a high of £138,632.
David Newnes, director of LSL, said: “Transactions among first-time buyers increased significantly in April as an improvement in the availability of high LTV mortgages allowed more first-time buyers to realise their dreams of homeownership.
"But weak wage growth and rising house prices are stymieing first-time buyer lending, and keeping a lid on a market that could otherwise be boiling away happily, by preventing further transactions. Mortgage rates may be at record lows but repayments are equal to a larger proportion of the average first-time buyer’s wage. And the size of the deposit they must save before they can purchase has increased both in monetary value and as a proportion of wage.
"Schemes like to Help-to-Buy are designed to launch a counter-offensive on deposit requirements. But the scheme may actually inflate property prices, so may turn out to be counter-productive.”
The LSL report shows that the average first-time buyer in April was aged 30 and earning £33,268 a year.
The number of purchases entirely self-funded in April by first-time buyers was 51 per cent with almost half of all first-time buyers gettiong help to buy from an outside source (such as family or a government scheme). A third of first-time buyers received direct financial help from their family, with an addiitonal one in twelve using funds from an inheritance.
Around 37 per cent of first-time buyers said they had only recently been in a financially sound enough position to buy, while 11 per cent bought as they believe it is a good time to invest because they expect house prices to continue to rise.
The most popular properties for first timers were houses with three or more bedrooms, with 44 per cent looking for at least three bedrooms. A third of first time buyers were looking for houses with two bedrooms. Only 21 per cent of buyers were looking to purchase a flat in April.