Economic recovery leads to 22 per cent rise in first-time buyers

Well over a quarter of a million people became first-time buyers across the UK last year.



Halifax, the country's largest mortgage lender, says about 265,000 homebuyers took their first step onto the property ladder in 2013. This was 22 per cent more than in 2012 and is the largest increase that the Halifax has seen for more than a decade.




Indeed, the bank estimates that 45 per cent of all mortgages issued last year went to first-time buyers.



However, despite the resurgence of interest in home ownership, particularly among new buyers, the figures are still almost 30 per cent lower than in 2007 at the height of the property boom.



Tellingly, about half of all homes purchased in 2013 cost less than EUR125,000 which indicates that most home buying activity, certainly by new homeowners, took place in areas outside London and the South East.



The increase in house buying is largely due to the continuing economic recovery together with initiatives and incentive schemes such as Funding for Lending, NewBuy and, more recently, Help to Buy.



According to Halifax calculations, first-time buyers currently spend a smaller proportion of their disposable income on mortgages than was the case back in 2007/8. This is because interest rates have been at record low levels for more than five years.



However, as the economy continues to recover, at some point later this year interest rates are expected to rise - and that will push up the cost of borrowing and mean home owners will have to spend more of their income on their mortgages.
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