Mortgage blog: First-time buyers increasingly confident about UK housing market


Wednesday 2nd May 2012

One in eight first-time buyers hope to purchase a home in 2012

A new survey has found that first-time buyers appear to be more confident about the property market in the UK than at any time in recent years. With a greater number of higher loan-to-value (LTV) mortgages available and an increasing expectation that house prices will start to rise in the next year, one in eight first-time buyers questioned were hoping to buy in 2012.

The survey also found that people looking to get on the property ladder are more aware of the need to save a larger deposit. And, almost half of those quizzed said that they were looking to save the deposit for their first home themselves.

First-time buyers to save more to secure better mortgage deals

The research by the Post Office found that one in eight first-time buyers are hoping to get onto the property ladder in the next five years. Of these people, 14% are hoping to buy in 2012 with a quarter planning to purchase in 2013.

Mike Cook, Head of Mortgages at the Post Office, says: "First-time buyers are the life blood of the property market and our research shows that challenging stories about first-time buyers and wider economic issues have not dampened aspirations to get on the housing ladder."

The survey also found that first-time buyers expect to have to save an average deposit of 16%, even considering the increasing number of high LTV deals available. Figures from Moneyfacts in May 2011 showed that there were 229 mortgage deals available to people with a 10% deposit, up by 41% from the same time the previous year. 48 lenders offered 90% deals in May 2011, according to figures published in the Daily Mail.

Mr Cook adds: "It is also interesting to see that despite the resurgence of 10% deposit mortgages recently, the average first-time buyer is aiming for the cheaper rates available at 15% or 20% deposit - even if it takes that bit longer to save."

The Post Office research also considered how first-time buyers were intending to save up their deposit. Some 45% said they planned to save the cash themselves, while a further 28% were saving up with the help of a partner. Just 16% of those questioned said that they planned to use the government's much publicised FirstBuy scheme to help them buy their first home.

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