UK Housing: First Time Buyers Hit 7 Year High on Wage Jump and Lower Deposits Reuters

The number of first-time buyer sales rose to a seven-year high in July as lenders allowed thousands of new home owners to stump up less of a deposit to secure a mortgage.

According to the latest First Time Buyer Tracker from Your Move and Reeds Rains, part of LSL Property Services, those jumping onto the property ladder have seen their wages rise over the last year, helping them secure financing.

"The first-time buyer market is still active, even as the wider property market is starting to show signs of cooling down. As the economic recovery gathers momentum, more buyers are finding themselves in a position where they can afford to own their own home," said David Newnes, director of estate agents Your Move and Reeds Rains.

"A whole generation of young buyers were trapped on the side-lines of the property market as the economy recovered from the recession, struggling to save for a deposit whilst inflation remained stubbornly high, savings rates were stuck at a historic low, and real wages fell.

"But the recent increase in high LTV lending options – enabled by Help to Buy – has allowed them a shot at getting on the ladder at long last, and the number of first-time buyers has climbed to a seven year high.

"Any stalling of the mortgage market caused by the introduction of MMR has mostly worked its way through the system. Lending is operating on full steam ahead once again, although the end to end process has tightened and elongated."

In July, there were 30,000 first-time buyer sales, up from 24,100 a year before. It was the highest number of monthly first-time buyers since August 2007.

Meanwhile, Your Move and Reeds Rains reported that the average first-time buyer deposit fell 10% year-on-year to £26,642 in June 2014, from £29,609 twelve months ago.

In tandem the average first-time buyer income stood at £37,000 in July compared to £35,843 a year ago.

Over the same period, the average first-time buyer LTV has risen from 79.5% to 82.9%, helped by the increase in higher LTV lending facilitated by Help to Buy.