The number of first-time home buyers rose by seven per cent in the year to February despite a slight drop in activity since the start of the year, new data today shows.
First time buyer sales stood at 21,000 last month, which was 6.6 per cent ahead of February 2015’s figure of 19,800, according to Your Move & Reeds Rains.
February is traditionally a quieter month for house sales and as a result there was a slight seasonal dip, with the number of completed first-time buyer property transactions falling by 300 – or 1.4 per cent – between January and February.
However, on a seasonally-adjusted basis, the report showed February’s figure was considerably higher at 25,900, just 500 below January’s seasonally adjusted total of 26,400.
Adrian Gill, director of estate agents Your Move and Reeds Rains, said: “[February] sits awkwardly between the New Year property market rush and the spring-summer activity high. However, beyond that seasonality, these figures demonstrate the strong, steady underlying growth that comes with growing first-time buyer confidence.”
The average first-time buyers spent £168,539 buying their property, up 14.5 per cent compared with £147,219 the same month last year.
Meanwhile the average size of a first-time mortgage grew from £121,534 to £139,088 – as did the average deposit, up 14.7 per cent to £29,451 on the year.
The rising costs means that a deposit now accounts for almost three-quarters (74.9 per cent) of a first-time buyer's annual income compared with 67.4 per cent in November 2015.
Gill said: “While those setting a first foot on the ladder this month have had to shell out more in terms of headline prices – as they seek to compete with buy-to-let investors for small, affordable homes – mortgage lending has easily kept pace.”
“Equally, although many first-time buyers will baulk at the rising deposit costs, there is a silver cloud to this grey lining. Larger deposits tend to indicate growing incomes and larger mortgages, meaning an impressive number of first-time buyers are accessing the capital to purchase a first home, even in a sellers’ market.