More first-time buyers use own cash

Market recovery continues
Market recovery continues

Fewer first-time buyers are resorting to the “bank of mum and dad” in order to make the jump on to the property ladder, according to analysis from mortgage lenders.

Almost half (48%) of people taking their first step on to the property ladder last year did so without needing extra cash from relatives such as parents and grandparents, the Council of Mortgage Lenders (CML) has estimated.

This marks a significant increase compared with the 34 per cent of first-time buyers who were thought to have got into the market in 2011 without needing added help in raising their deposit.

Figures recently released by the CML have shown that more than 300,000 home loans were handed out to first-time buyers during 2014, marking the largest number seen since 2007.

First-time buyers also continued to account for an rising proportion of the overall market representing 46 per cent of purchases in 2014.

The findings were released as the Government said that its flagship Help to Buy housing scheme has helped more than 88,000 people buy a new home since 2013. So far, 80 per cent of scheme completions under the Help to Buy equity loan and mortgage guarantee schemes have been made by first-time buyers.

Help to Buy aims to help credit-worthy people who only have small deposits saved to move on to or up the property ladder.

The scheme not only sparked increased competition to offer low deposit mortgages between lenders who were taking part in Help to Buy, but also saw lenders who were not taking part in the scheme launch a new stream of low deposit mortgages on to the market.

On its website, the CML said that the widened availability of low deposit mortgages has helped to make first-time buyers less reliant on cash support from their family.