U.K. First-Time Buyers Surge to Highest Since 2007, Halifax SaysJack Aldane
The number of first-time U.K. home buyers rose to a seven-year high in the first half of 2014, according to a Halifax report that showed new homeowners spend about a third of their disposable income on mortgage payments.
In the first six months of the year 144,500 people bought their first home, according to the mortgage unit of Lloyds Banking Group Plc. That’s up 25 percent from the same period a year earlier and is the biggest increase since the first half of 2007, before the financial crisis.
While the number of new buyers has increased, they’re spending less on mortgage repayments, the report showed. First-time homeowners spent 31 percent of their monthly disposable income paying off mortgages, compared with a peak of 47 percent in the first half of 2007, Halifax said.
Bank of England officials took action last month to limit mortgage lending and prevent an unsustainable build up of consumer debt after record-low interest rates and government incentives raised the prospect of a bubble. BOE Governor Mark Carney has said the housing market poses the biggest threat to Britain’s recovery.
“The resurgence in the number of first-time buyers getting on to the housing ladder has been buoyed by improving economic conditions, rising employment levels as well as government schemes,” said Craig McKinlay, a mortgages director at Halifax. They accounted for 46 percent of all home purchases in the first half, he said.
Today’s report also showed how prices varied regionally, with first-time buyers paying 306,354 pounds ($522,058) for a property in London and 110,410 pounds in the North. The average age of new homeowners is 32 years in London, compared with 28 years in Wales and the North.