Taylor Scott International News
First time buyers in the UK are resilient despite a month on month dip in property sales to this group, according to the latest first time buyer tracker index. It shows that people buying their first home increased by 6.6% year on year but month on month fell by 1.4% between January and February 2016. The data from Your Move and Reeds Rains also shows that total monthly volume of first time buyer transactions was 21,100 in February but on a seasonally adjusted basis it is considerably higher at 25,900. According to Adrian Gill, director of estate agents Your Move and Reeds Rains, February is a traditionally quiet period for the first time buyer market but the figures demonstrate the strong, steady underlying growth that comes with growing first time buyer confidence. ‘This optimism may begin to reveal itself more clearly in March, when an Easter uplift may sweep away any residual doubts among some first timers. While the more general mismatch between buyers and sellers will continue to exert upwards pressure on prices, a combination of pluck and poise from first time buyers will ensure that this does little to impact the overall trend of growing demand at this end of the market,’ he explained. The figures also show that the costs of buying and owning a first home have remained broadly stable in February, with lower borrowing costs balancing larger prices and deposits. Average mortgage rates for first time buyers have improved, down 0.56% on a 12 month basis and by a much slighter 0.03% between January and February 2016. February’s average mortgage rate also represents the lowest mortgage rate for first time buyers in over five years. Similarly, the average LTV ratio remains high, meaning first time buyers have been able to borrow more against the value of the home they wish to purchase. February’s average loan to LTVs recorded in 2014/2015 and represents only a 0.1% fall on February 2015. While first time buyer property prices have risen significantly on an annual basis, mortgage lending levels have kept pace. In February, the average purchase price for a first time buyer home stood at £168,539, an increase of £21,320 or 14.5%, on February 2015’s average of £147,219. However, over the same 12 month period, the average size of a first time mortgage grew from £121,534 to £139,088, an increase of 14.4%. Larger deposit costs represent the other side to this balance of affordability, the report points out. In February the average deposit put down by a first time buyer stood at £29,451, an increase of 14.7% or £3,766, on an annual basis. The report suggests that this uptick has been a factor in the growing proportion of first time buyer income which is consumed by deposit costs. In November 2015, a deposit ate up 67.4% of an average first time buyer’s annual income, whereas in February of this year the average deposit consumed, on average 74.9% of their income. However,… Taylor Scott International
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