First-time Buyer
First-time buyers more financially savvy
First-time buyers are increasingly focused on getting value for their money by using savings accounts to build a deposit more quickly,
and purchasing property they feel is a good investment.
Research by Yorkshire Building Society found that almost half (45%) of consumers who bought their first home in the last 12 months felt it had to be a good investment. The survey also found that 49% of new buyers took the decision to purchase a house as they thought renting was a waste of money.
However, the number of potential first-time buyers who felt it was the present moment was the right time to purchase fell from 13% to 6%. The amount of first timers who require financial assistance from friends and family rose to 10%.
Over half of first-time buyers chose a fixed rate mortgage product as they felt it gave them more security.
With the average deposit needed for a first-time buyer now approximately £26,000, the mutual said that the consumers were becoming increasingly financially savvy to help them save for their first property.
The survey said of those who purchased their first house in the past year, 60% had set up a regular savings account specifically to help fund a deposit. This is 50% up on 2007 figures.
On deposits, in the North East it takes an average of four years and five months to save for a typical deposit of £14,691, compared to 18 years and 10 months in the Greater London area where the average deposit is £61,167.
Chris Smith, group direct mortgage manager at Yorkshire Building Society, commented: “In the last five years mortgage activity in general has more than halved, and today’s first-time buyers are facing a squeeze on incomes and pay rates that are not keeping pace with inflation.
“However, it’s encouraging to see the proportion of first-time buyers has actually begun to increase in this period and more people are seeing home purchase as a prudent financial decision.
“First-time buyers are vital to the housing market, and here at the Yorkshire we are doing our best to help. In the first six months of 2012, we increased our overall net mortgage lending compared to the same period last year, with approvals to first-time buyers up 32%.”
