For a long time following the 2007 financial crisis, it has been near impossible for first time buyers to get onto the property ladder. However, 2014 reported the highest level in seven years.
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2014 lending levels for first time buyers
The Council of Mortgage Lenders indicated almost 311,500 mortgages were arranged for first time buyers in 2014. Whilst the value of lending didn’t quite reach pre-crisis levels, it wasn’t far off:
- 2014 – £45 billion
- 2007 – £47.2 billion
Help from the government’s “Help to Buy” Scheme
The virtual disappearance of young home buyers was a feature of the mortgage market collapsing in 2007. However, partly thanks to the government’s “Help to Buy” scheme, first time buyers are able to enter the property market with just 5% or 10% deposit, making it a somewhat viable option again.
Low mortgage rates for first time buyers
Some first time buyers are still not able to obtain the super cheap mortgage rates that are on the market right now.
However, owning a property is now affordable for a first time buyer due to the low rates of interest compared to previous years. The proportion of gross income spent on mortgage payments in December 2014 was significantly less than that in the same month in 2007:
- 2014 – 19% of gross income
- 2007 – 25% of gross income