The UK housing market dipped to a 17 month low in November according to figures from the Bank Of England, confirming the slow down in the summer recovery.
But figures from Halifax show that the number of first time buyers in 2014 rose to the highest level in seven years.
The Bank Of England figures show that just over 59,000 home loans were approved in November, down on the average 63,100 recorded over the previous six months and 22% down on the 76,574 offered in January 2014.
November’s figures were the lowest since June 2013, but there is speculation that the Chancellor’s changes in stamp duty and a new price war in the mortgage market will see another upturn in the market over the next couple of months.
In cash terms, the value of mortgages fell to £9.6 billion, down from £12.2 billion in January.
Though the market is currently slowing, Halifax have reported first time buyers in 2014 as a whole were at their highest level since 2007.
The lender estimates that 326,500 people bought their first house or flat last year – 22% up on 2013 and the highest total since the start of the financial crisis.
Experts believe that cheap mortgage rates and the success of the government’s Help To Buy scheme persuaded buyers to take the plunge despite rapidly rising prices in some sectors of the market. Improved job prospects could also have been a contributory factor.
Halifax mortgages director Craig McKinlay said: “Improving economic conditions and rising employment levels have boosted confidence among those thinking about getting onto the housing ladder for the first time.”
The Halifax figures showed the size of the average deposit fell by 7% in the year with purchasers having to find a typical down payment of £29,218 instead of the £31,582 of a year earlier. Lower borrowing rates also allowed them to spend a lower proportion of their income than in previous years.
In the third quarter of last year new buyers were spending an average of 32% of their disposable income on their mortgage. Back in 2007 that figure was 50%
It’s no great surprise given the overheating market in the summer that overall prices were up. The average first time purchase cost the buyer £171,870 – a 9% rise on the previous year.