Number of first time buyers rises by 22% in 2014
- 22nd January 2015
- Buying Property News
Better mortgage deals, Help to Buy and stamp duty changes cause the increase
The number of first time buyers has risen by 22% in 2014. An estimated 326,500 buyers took their first step on the property ladder in 2014, up from 268,500 in 2013. That was the highest total since 2007, prior to the start of the financial crisis.
The increase has been caused by a number of factors, including: improved mortgage rates, the Help to Buy scheme and the changes to the stamp duty tax.
Mortgage affordability has improved significantly in recent years, with the proportion of disposable earnings devoted to mortgage payments by a first-time buyer falling to 32 per cent in the third quarter of 2014, helped by record low mortgage rates.
The government’s Help to Buy Scheme, which allows people to put down a deposit for as little as 5 per cent, as well as low mortgage rates, has also contributed to the rise in first time buyers.
Changes to the stamp duty tax have also helped prospective buyers. The method used to calculate the amount of stamp duty a buyer is required to pay when purchasing a property has been changed. Consequently, buyers that were previously couldn’t afford some properties, because of high stamp duty costs, have a greater range of properties to choose from.
Stephen Ludlow comments: “The government’s Help to Buy scheme has proved very successful in helping first time buyers get a foot on the property ladder. Mortgage affordability has also improved over the past few years, which has really stimulated the market.
“The changes to the stamp duty introduced by the government in Autumn 2014 have proved a huge boost to buyers that were just priced out of the market by the previous rules.”
The government’s Help to Buy scheme has proved very successful in helping first time buyers get a foot on the property ladder. Mortgage affordability has also improved over the past few years, which has really stimulated the market.
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