According to the latest figures from LSL Property Services, the average first-time buyer in July was aged 30, with an annual salary of £36,299, 4 per cent higher than in July 2012. The average purchase price for a first-time buyer rose by 8 per cent year-on-year in July, and is now £146,726.
The number of first-time buyers who were able to self-fund their purchase fell to 41 per cent in July, from 51 per cent in April. Around 36 per cent of all first-time buyers in the UK received financial help with their deposit from parents or relatives, while 9 per cent benefited from an inheritance - 2% received family help with mortgage repayments. Another 4 per cent received financial help from a government scheme such as Help to Buy, up from 1 per cent in April.
A total of 44 per cent of all first-timers were looking for houses with three or more bedrooms. The second most popular property type was two bedroom houses (31 per cent). Flats continued to attract far fewer first-time buyers with just a quarter of buyers looking for flats rather than houses.
Four in ten first-time buyers said they were choosing to buy now as they had only recently been in a position financially stable enough to purchase a property, while a quarter chose to buy to own a house with their partner, and another quarter feel it is time for them to settle down. Only 8 per cent bought for investment purposes, expecting house prices to rise, down from 11 per cent in April.
First-time buyers are also confident that the value of property is set to rise. Almost half of UK first-time buyers think that house prices will rise by up to 5 per cent in the next year, while a further two in ten believe prices will rise between 5 per cent and 10 per cent.
Connells also reported that the number of first-time buyers in August 2013 outpaced those recorded in August 2007. There were 40% more first-time buyers last month than in August 2012 and 1% more than August 2007.
John Bagshaw, Corporate Services Director of Connells Survey & Valuation, comments: "Numbers of first-time buyers are flowing again, but it isn’t like the floodgates have been thrown open for everyone. There are still thousands of households whose earnings have little chance of matching inflation – let alone being sufficient to support loans based on current house prices. The other side of the story to first-time buyers are those still renting, and buy-to-let activity is still growing at an astounding pace to keep up with demand for renting."
In the LSL survey, tenants currently unable to become first-time buyers named the inability to save for a deposit as the biggest stumbling block to homeownership. More than half are unable to buy as they can’t save for a deposit, and a growing number of potential first-time buyers (19according to chartered surveyors Connells Survey & Valuation) are concerned that rising costs like stamp duty will get in the way, up by a third from 13according to chartered surveyors Connells Survey & Valuation in December 2012.
David Newnes continues: “It remains a huge challenge for first-time buyers to purchase property in the capital. House prices are more expensive, and the size of deposit required dwarfs that in the rest of the country. It’s the reason why six out of tenants in London can’t afford to buy. And there are further concerns for the London market. Higher legal fees and stamp duty costs are turning further first-timers off buying."