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By Mark Dickety on


Is it time for first-time buyers to take advantage of a perfect storm?

In early January 2022, the Yorkshire Building Society announced that, according to its analysis, the number of first-time buyers had hit a 20-year high. Over 408,000 first-time buyer transactions were recorded in 2021 and, considering the backdrop of a third lockdown and no guarantees the pandemic was over, this made remarkable reading.

Rightmove reported that first-time buyers’ purchase prices had also reached a record high – up 1.4% in December 2021 to £214,000 and first-time buyers made up almost a third of all purchases. Indeed, one personal finance analyst hailed ‘the welcome return of first-time buyers [who] are continuing to breathe life into the market’.

The good news is that there’s no sign of any end to the trend in 2022. The really good news is this has little to do with a potential slowdown in property prices as some housing experts have suggested. It’s all to do with a perfect storm of support that’s out there to help first timers get onto to the once elusive property ladder.

Low-cost mortgages

With mortgage products offering interest rates around just 1%, borrowing remains at a record low. Even if the Bank of England base rate rises a little, it’s unlikely to dent first-time buyer affordability.

Stamp duty savings

Thanks to the Chancellor’s Stamp Duty Holiday that was launched in July 2020 and extended to June 2021, an extra 140,000 transactions were recorded. The holiday will have ended for many, but first-time buyers are still exempt from paying stamp duty for properties valued up to £300,000.

Earnings rise

According to Statista, the market and consumer data specialist, average weekly earnings are on the up. In November 2021, earnings grew by 3.5% compared with the same month in 2020 – adding to a three-month average rise of 4.2%.

Help to Buy

Since the government’s Help to Buy initiative was launched in 2013, 339,000 buyers have taken advantage and made a more affordable leap onto the housing ladder. The scheme changed slightly in April 2021, but it still leaves the door wide open for first-time buyers to make a more affordable move into a new-build property. You can find out more about the scheme here: https://www.ownyourhome.gov.uk/scheme/help-to-buy-2021-2023/

Generation Buy

The government-backed mortgage scheme to help home buyers with deposits as low as 5% secure a mortgage launched in 2021 and has seen a meteoric rise in the number of low-deposit mortgage products available. The scheme has never been more popular.

Parent power

1.4 million home buyers have been supported by the Bank of Mum and Dad to the tune of £53 million to buy their first home in recent years. As the Mortgage Advice Bureau reveals: 84% of parents help their children, of that, 57% is a gift, 18.3% is a no-interest loan and 4.8% a loan with interest. Parent power also extends to serving as a guarantor on a mortgage and, with the guarantor’s income taken into account, it can increase the level of borrowing.

With so many positives and open doors to first-time buyers, the prospect of their leap onto the ladder slowly looks distinctly remote. For those thinking of holding on in the hope of a slowdown in property price rises, there are no guarantees and, in the absence of foresight, it might well be more prudent to make a savvy move now and enjoy the perfect storm that could make a first home an affordable reality.

Mortgage Decisions has a portfolio of competitive first-time buyer mortgages that take account of the schemes that we’ve highlighted above and will ensure any first move is affordable and fits your circumstances to a ‘T’.

Contact us on 03454 500 200 and we’ll match you with the right mortgage product to help you make your first move.

Your home may be repossessed if you do not keep up repayments on your mortgage.
There may be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances.
The fee is up to 1% but a typical fee is 0.3% of the amount borrowed.

Mark Dickety
Mark is an experienced Mortgage and Protection Adviser who has been providing mortgage advice since 2010. He thrives on finding the right solution for each of his clients' requirements ensuring they have the best experience possible.
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