The number of first-time buyers who took out a house with a mortgage last year is expected to be at the lowest level in ten years, a major housing association says.
According to the Yorkshire Building Society, first home buyer numbers are down by a fifth in 2023 compared to the previous year.
According to the report, 370,287 buyers entered the first rung of the property ladder in 2022 – with this number falling by 21 per cent to around 290,000 in 2023, according to the report.
This would be the lowest level since 2013, when around 260,000 people bought their first home.
Big drop: The number of starters is expected to have dropped last year
It marks a huge drop from 2021, when the number of start-ups was at a two-decade high of more than 400,000, amid the pandemic-fueled “race for space” as more people were able to work from home.
December 2021 saw the first of a series of base rate increases by the Bank of England, driving up borrowing costs, including mortgages.
Interest rates have been unchanged in recent months, and the recent easing of inflation has fueled speculation about when rates might start to fall.
The fall in the number of first-time buyers last year was less severe than the fall in the overall number of buyers, Yorkshire said.
This means that the estimated share of first-time buyers represented a larger share of home buyers last year, at 54 percent, compared to 53 percent in 2022.
It was also significantly higher than the 41 percent of buyers taking their first step onto the property ladder a decade ago.
De Yorkshire said that while activity has fallen across all types of borrowers due to higher interest rates, cost of living pressures and high house prices, first-time buyers remain determined to overcome these challenges by living in their own physical homes. to invest.
But it added that borrowers are finding it harder to meet affordability requirements due to the combination of higher house prices, rising daily costs and interest rates.
Ben Merritt, mortgage director at Yorkshire Building Society, said: 'First-time buyers are the lifeblood of the market and are still keen to buy.'
He added: 'The wider market is relying on it, not least to support purchases further up the chain.'
Yorkshire Building Society group economist Max Shepherd added: 'Current market expectations point to several rate cuts in 2024, which would reduce mortgage rates in the first half of the year.'
The calculations are based on credit data from banking and financial industry body UK Finance up to September 2023, with buyer numbers for October, November and December 2023 estimated by the Yorkshire Building Society, in line with previous patterns of new buyers.