More people have decided to jump onto the housing ladder in 2014 as mortgages have become easier to get, the annualHalifax First Time Buyer Review shows.
The number of first-time buyers last year reached 326,500, the highest level since 2007. This was a 22 per cent improvement from a year ago, adding up to a 50 per cent overall increase in the number of first-time buyers in the past two years.
Thanks to low rates and government-funded housing programmes the mortgage affordability has improved considerably in the last seven years as well. In the third quarter of 2014, first-time buyers spent 32 per cent of their disposable income on mortgage payments. This figure was at a peak of 50 per cent in the summer of 2007.
The cost for taking out a mortgage has become smaller as stamp duty changes saved first-time buyers an average of £781 last year and the amount of the average deposit paid was 7 per cent less than in 2013.
Almost 60 per cent of first-time buyers were able to afford a home above the stamp duty threshold of £125,000. The proportion of people who spent between £125,000 and £250,000 on their first home in 2014 was 47 per cent. The purchases priced above £250,000 were 13 per cent of all first-time deals.
London remains the most expensive place to live in the UK, accounting for 56 per cent of first-time buys priced above £250,000 and for all ten least affordable local authority districts.
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