Demand remained high among first time buyers in 2021, despite ongoing pandemic restrictions.

The Yorkshire Building Society has estimated that the number of first time buyers in the UK housing market exceeded 400,000 for the first time since the 2008 financial crash. Despite a return to lockdown conditions early in the year, the Yorkshire Building Society estimates a total of 408,379 first time buyer transactions were carried out in 2021, more than double the amount carried out annually in the years following the crash and an increase of 35% from the 2020 figure of 303,000.

First time buyers are now thought to account for as much as 50% of all home purchases involving mortgages, compared to 36% in 2007. Falling unemployment, the low cost of borrowing and the return of low deposit mortgage deals are thought to be contributing to rising demand among first time buyers.

Data from the Legal and General Mortgage Club’s ‘SmartCriteria’ tool, used by many advisors to source mortgage deals for clients, suggests that first time buyers are approaching their finances and the purchase of their home in new ways.

Enquiries for mortgages which cater for buyers with impaired credit histories such as missed mortgage payments and debt management plans fell by around 10% in October and November 2021, while searches for mortgages which allow gifted deposits increased by 38% in the same period.

Gifted deposits allow friends and relatives – most commonly the ‘Bank of Mum and Dad’ – to contribute some or all of the deposit necessary to secure a mortgage, and are a popular way for families with sufficient resources to help their adult children escape ‘Generation Rent’.

Speaking about the current Mortgage Market, McCrea Mortgage & Protection Adviser Ged Cumming said: ‘‘Two common areas that made first time buyer mortgages more difficult to get last year were loan to value available and self-employed income. Many lenders reduced their loan to values and tightened lending criteria regarding what income could be used around self-employed income to help them cope with the uncertainty that the Coronavirus pandemic has created.’’

‘‘This year we are seeing more lenders return to 95% which means only a 5% deposit would be required, and the strictness on what can be used on self-employed income has also eased, so we now have with more options for each scenario than what was available last year.’’

Our independent mortgage advisers are not tied to any limited range of products or providers, and can scour the entire mortgage market to help find the ideal mortgage for first time buyers, second home buyers, buy to let investors and more. Get in touch today for a free no-obligation consultation on how we can help you move in to your ideal home in 2022.