What are the drivers behind the growth in first-time buyers?

 
What are the drivers behind the growth in first-time buyers? [PRImageFactory via iStock]

The proportion of sales in the British housing market that are to first-time buyers is now at the highest level it has been for some time, according to data released this month, which has suggested that there are now more first timers than at any time since 2000. 

The National Association of Estate Agents (NAEA) said in its latest report that in October of this year, as many as 32 per cent of all sales carried out were to first timers making their first step onto the property ladder. This represented a rise of nine per cent when compared to the month before, and was the highest reading seen since the NAEA started recording such data 16 years ago. 

It also comes at a time when the number of sales remains relatively high, which is encouraging and shows that first timers are still active in the property market nationwide at the moment. 

But with first timer numbers creeping up once again, what are the drivers behind this growth in sales, and is it the government or other factors helping to give people that foot up onto the ladder that they need at long last?

Government schemes

The government schemes available to first-time buyers at the moment may be somewhat confusing - after all there are no fewer than eight in operation nationwide - but the Council of Mortgage Lenders' latest report seems to suggest that even though it may be a minefield of schemes, buyers are finding their way, and Help to Buy, Right to Buy and Starter Home schemes are helping people onto the ladder. 

It said that the 'patchwork' approach that has been taken by the government with its variety of schemes means that there is almost something for everyone, although there are varying degrees of generosity involved that means buyers need to ensure they pick the right one for them. 

For example Right To Buy and Starter Home both give the buyer a lot in terms of value for their money, while the CML said that Shared Ownership is the least valuable in money terms, with only part ownership for buyers. However, it does also give the best range of available properties in terms of value, which is a positive for those who want to go for a more expensive home. 

Bank of mum and dad

While many people are utilising government schemes to get themselves onto the property ladder, there are others who are still turning to their parents and other family members as a means of raising the cash they need to get their first home. 

In fact, according to Clydesdale and Yorkshire banks' collective research, nearly half of people who do get themselves a footing on the property ladder do so with help from their relatives. It said that 18 per cent of people will get a loan from their family when they are buying their first home, while another 18 per cent are simply gifted money from their parents for a deposit that helps them get onto the ladder. 

The data shows that even though the government is doing more to help first-time buyers, as it has been trying to do for some years now, the old-fashioned method of simply helping out family is still hugely popular, and with the swell in the number of newcomers to the market in recent years, it is still apparently helping to boost the market as a whole.