First-time buyer numbers are back on the increase – but what does this previously elusive breed look like? Vicky Shaw reports

THE recent housing market revival has brought with it the return of a species that had become frighteningly scarce – the first-time buyer.

The resurgence of this sector is highlighted in research by Halifax, which found that, not only are first-time buyer numbers increasing, they are increasing at their fastest rate in more than a decade.

Using figures from the Council of Mortgage Lenders (CML) as well as its own, Halifax’s report estimates there were 265,000 first-time buyers in the UK last year. This figure represents a jump of more than one-fifth (22 per cent) on 2012, and the strongest annual rise seen since 2001.

The report also revealed first-time buyers accounted for 44 per cent of house purchases made using a mortgage last year, up from 40 per cent in 2012.

This increase is significant – and not simply for those frustrated people whose dreams of buying their first home have been repeatedly quashed in recent years.

First-time buyers are a vital piece of the whole housing market jigsaw.

Without them, housing market chains grind to a halt.

People who want to take their second step up the housing ladder, perhaps because they have started a family and have grown out of their existing property, become stuck from the lack of people willing or able to buy their starter home from them.

Halifax’s figures also show how ultra-low interest rates have helped to improve mortgage affordability for firsttime buyers in recent years.

The proportion of a firsttime buyer’s disposable earnings spent on mortgage payments stood at 30 per cent in the past three months of last year, compared with a peak of 50 per cent in the summer of 2007.

A string of Government schemes have given those aspiring to get on the property ladder a helping hand too.

In October, a new phase was launched in the flagship Help to Buy scheme, which offers state-backed mortgages to people with deposits of only five per cent.

But critics of the scheme have argued that a lack of homes for sale amid rising demand from buyers has put an upward pressure on house prices, meaning buyers have to stretch their borrowing further to keep up with the price increases.

Fears have also been raised about what will happen to borrowers when interest rates rise again and their mortgage payments go up.

As house prices rise, this also has a knock-on effect on stamp duty costs. Halifax found that, while close to half (45 per cent) of all first-time buyer purchases last year were below the £125,000 stamp duty threshold, a similar proportion (46 per cent) were priced at between £125,000 and £250,000, attracting the lowest stamp duty level of one per cent.

So, what are the characteristics of this new, exciting breed of first-time buyer?

According to Halifax’s findings, first-time buyers are getting older, despite the series of new schemes aimed at giving them a helping hand.

The average age of a firsttime buyer is now 30, up from 29 in 2011. In London, firsttime buyers are typically aged 31 by the time they make it onto the property ladder.

The rising age of the firsttime buyer is hardly surprising given another finding about the size of deposit this sector needs to scrape together.

The report found that the average first-time buyer deposit last year stood at £30,943 – marking an 11 per cent jump from just over £28,000 in 2012.

What is more, this figure is a huge leap of 77 per cent from 2007, when the typical deposit put down by this sector was just under £17,500.

In London, first-time buyers put down an average deposit of £56,183 last year. This is more than three times the average first-time buyer deposit in the North-East, at £15,862.

The findings also reveal the vital role that the bank of Mum and Dad has played in giving many aspiring firsttime buyers a leg up.

The CML estimated that two-thirds (65 per cent) of first-time buyers had some form of financial help in mid- 2012, compared with only one third (31 per cent) in mid-2005.