The total of first-time buyers “exceeded 400,000 last year for the first time since 2006”
The number of people who took their first steps on the real estate ladder with a mortgage last year is estimated to have exceeded 400,000 for the first time since 2006.
But the Yorkshire Building Society (YBS), which carried out the calculations, said the number of first-time buyers was unlikely to continue to be seen at that level in 2022 and beyond.
First-time buyers accounted for half (50%) of home purchases with a mortgage in 2021, up from just over a third (36%) in 2007, according to the YBS.
Across the UK, he estimates there were 408,379 first-time buyers with mortgages in 2021.
This is the first time that the total has exceeded the 400,000 mark since the 400,900 first-time buyers recorded in 2006.
The analysis was based on the UK Finance trade association’s loan figures up to October 2021, with the YBS making estimates for November and December of last year.
The total of first-time buyers in 2021 was a 35% increase from 2020, when it was 303,000.
The YBS said a previous record for first-time buyers was set in 2002, when 531,800 took their first step on the housing ladder.
Last year’s total is more than double the number in the aftermath of the 2008 financial crisis, when the figure was 191,000.
House prices have generally reached new highs over the past year, posing a barrier for those trying to climb the real estate ladder. Some people may find that the prices have increased more than what they have earned in the past year.
Low mortgage rates help keep mortgage payments relatively affordable.
The Yorkshire Building Society said the price of a typical home for a first-time buyer rose 9% to Â£ 222,997 in the year through October.
A year earlier, the average first-time buyer home had cost Â£ 204,230 – Â£ 18,767 less.
Nitesh Patel, Strategic Economist at YBS, said: âThe performance of the first-time buyers market in 2021 has been extraordinary, especially against the backdrop of uncertainties caused by the foreclosure of the first months of the year.
âThere are strong demand drivers behind the increase in volumes. Low borrowing costs are an important factor and the increased availability of more low deposit mortgages has also been a catalyst, mainly for first-time buyers.
“Unemployment has also fallen over the past year and the labor market has strengthened since the gradual reopening in April.”
He added: âIn the short term, the demand for housing will continue to exceed supply; however, with prices at a high level relative to local incomes, this should dampen activity. Therefore, it is unlikely that we will continue to see a number of first-time buyers at this level in 2022 and beyond. “
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