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UK first-time homebuyers reach highest level since 2007

Published 19/07/2014, 00:04
UK first-time homebuyers reach highest level since 2007

LONDON (Reuters) - The number of first-time homebuyers in Britain hit its highest level since the start of the financial crisis in the first half of 2014, helped by the recovering economy and policies such as Help to Buy, a survey showed on Saturday.

First-time buyers accounted for 46 percent of all buyers between January and June, the highest proportion since 2000, with their number surging by 25 percent to an estimated 144,500, according to mortgage lender Halifax.

British finance minister George Osborne launched the Help to Buy mortgage guarantee scheme last year, saying he wanted to help would-be home-buyers who were unable to pay large deposits, in particular first-time buyers.

Critics of the plan say it risks pushing up prices and will do little to spur new home-building. The International Monetary Fund said in June that Help to Buy might need to be scrapped if it grows a lot and adds to risks of a housing bubble in Britain.

Official data released in May showed Help to Buy accounted for only a fraction of mortgages in the early months of 2014 but the existence of the programme is believed to have boosted high-deposit lending more generally.

A separate scheme, called Funding for Lending, has helped bring down the cost of borrowing although it was revised at the start of this year and no longer includes mortgages.

Halifax said mortgage affordability had improved sharply since the 2008-09 recession. In the first half of 2014, first-time buyers spent 31 percent of disposable earnings on mortgage payments, down from 47 percent in the same period in 2007.

The national average of first-time buyers deposit was 31,129 pounds ($53,300) in the second quarter of this year, an increase of 9 percent from the same period in 2013, Halifax said. First-time buyers in London put down the largest average deposit, over 4.5 times more than in North West England, which has the lowest.

© Reuters. Sold new build homes are seen on a development in south London

As deposits and property prices have risen, so too has the age of those entering the housing market. The average age of a first-time buyer is 30 nationally, up from 28 in 2009, and is 32 in London.

(Reporting by Tess Little; Editing by William Schomberg and Catherine Evans)

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