By Daniel Hunter
The number of first-time buyers in the UK surged in November, according to LSL Property Services.
More than 34,000 first-time buyers completed the purchase of their house in November, up 15% from October and is the highest monthly figure since the August 2007.
The surge in first-time buyer numbers was helped in part by falling mortgage rates. The average first-time buyer mortgage rate was 3.92% in November, 0.27 percentage points lower than October (4.19%) as rates have dipped in response to low inflation and the continuously low base rate.
As a result, mortgage repayments have held steady as a proportion of income, even as purchase prices have risen. The average first-time buyer purchase price rose 4% year-on-year to £151,020 in November, but over the same period mortgage repayments have fallen from 20.9% to 20.2% as a proportion of income.
Adrian Gill, director of estate agents Your Move and Reeds Rains, said: “Record low rates have set off a blast of first-time buyers over the last month, with the number of completions climbing upwards to reach a post-recession high. Mortgage rates are slipping downwards, helped by low inflation and growing certainty that an upwards revision of the base rate is moving away from the horizon of the New Year and deep into 2015. At the same time, wages have finally leapfrogged inflation — meaning people are starting to feel slightly richer — and repayments are shrinking as a proportion of their income.
“Not only this, further support for first-timers has arrived in the shape of the newbuild discount scheme for under 40s — an extension of Help to Buy which will encourage the regeneration of brownfield sites into first-time buyer homes. This is important. The economic recovery may have shone light onto London and the South East, but there are still many regions in which the effects are only being dimly felt — areas in which many first-timers are yet to see their finances turn a corner — areas in which they need options like Help to Buy in order to get a shot at becoming homeowners.”
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