Number of first time buyers hits 20 year high

Record year for first-time buyers stepping onto the ladder, as more than 400,000 buy their first home. The highest number in 20 years.

Key Stats

• The number of people taking their first step on the property ladder soared to a 20-year high in 2021
• An estimated 408,379 people bought their first home during the year, 35% more than in 2020
• First-time buyers accounted for 50% of all people purchasing a property with a mortgage in 2021, up from a low of 36% in 2007 during the global financial crisis

The number of people taking their first step on the property ladder soared to a 20-year high in 2021.

An estimated 408,379 people bought their first home during the year, 35% more than in 2020, according to Yorkshire Building Society.

It was the first time that first-time buyer numbers have broken through the 400,000 threshold since 2006, while the figure was also more than double the 200,000 people who purchased their first home each year between 2008 and 2012.

First-time buyers accounted for 50% of all people purchasing a property with a mortgage in 2021, up from a low of 36% in 2007 during the global financial crisis.

But numbers still have some way to recover to reach the previous first-time buyer peak seen in 2002, when 531,800 people bought their first home.

Why is this happening?

A combination of high levels of employment and low interest rates have helped to drive the increase in first-time buyer numbers.

There has also been a significant rise in the number of mortgages available for people with only small deposits, after lenders began offering 95% mortgages again.

Many banks and building society pulled the deals in 2020 during the early stages of the Covid-19 pandemic. But the government-backed mortgage guarantee scheme has increased confidence once more.

There are now more than 350 mortgages available to buyers borrowing 95% of their home’s value, while interest rates on these products have fallen to a record low.

At the same time, people purchasing their first home have also benefitted from a raft of government schemes.

Anecdotal evidence also suggests many first-time buyers were able to save more towards a deposit during the pandemic due to decreased expenditure during successive lockdowns.

Who does it affect?

The figures are great news for aspiring first-time buyers as they show mortgage lenders are once again happy to lend to this sector of the market.

They are also good news for people who want to trade up the property ladder.

First-time buyers play a vital role in the market through buying entry-level properties, enabling the owners of these homes to trade up to bigger properties.