It was reported by Inside Conveyancing this week, that there was an estimated 12% increase in the number of first-time buyers in 2012, according to the 2012 annual Halifax First-Time Buyer Review.
There were around 216,000 first-time buyers (FTBs) in 2012, up from 193,000 in 2011 – the highest annual total since 2007. FTB numbers increased by more than the total number of house purchasers, increasing their share from 38% in 2011 to 40% in 2012.
Affordability for first-time buyers remains close to its most favourable level since 2003. The average house price paid by a first-time buyer in November 2012 was affordable for someone on average earnings – based on the ratio of the average house price to earnings being below the long-term average of 4.0 – in 39% of all local authority districts (LADs) in the UK. This compares with just 5% at the peak of the housing market in 2007, but is marginally lower than in 2011 (40%) due to a modest increase in the average price paid by FTBs in 2012.
Mortgage affordability has also much improved in recent years. The proportion of disposable earnings devoted to mortgage payments by a new first-time buyer stood at 27% in 2012 Quarter 3; more than half of the peak level of 50% in Q2 2007 and comfortably below the long-term average of 34%. Nationally, the average house price paid by a FTB in 2012 was £139,921; an increase of 3% on £136,195 in 2011.
Over half (55%) of all FTB purchases in 2012 were below the £125,000 stamp duty threshold. Almost four in ten (38%) properties bought by FTBs were priced between £125,000 and £250,000 and would have been exempt from stamp duty if the temporary increase in the starting threshold had been in place for the entire year. The overwhelming majority (96%) of FTBs in London bought homes above the £125,000 threshold.
Martin Ellis, housing economist at Halifax, said the increase was due to the improvement in affordability resulting from the reductions in both house prices and mortgage rates in recent years.
Read the full article here http://insideconveyancing.co.uk/content/first-timebuyernumbersathighestsince2007?utm_source=Inside+Conveyancing+Mailer+-+03.01.13&utm_campaign=Inside+Conveyancing&utm_medium=email