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First time house buyers at highest level in 7 years

The number of first-time buyers in 2014 rose to its highest level since 2007, according to one of the UK’s largest lenders.

The Halifax estimates that 326,500 people bought their first house or flat last year, a rise of 22% compared to 2013 and the highest since the financial crisis began.

It is believed that the main causes of the surge are cheap mortgage rates, and government schemes like Help to Buy, which require small deposits. Moreover, better job prospects may also have helped.

In 2014, first-time buyers typically had to find a down-payment of £29.2k, compared with £31.6k the year before, as average deposit fell by 7%.

In the third quarter of 2014, first-time buyers were spending an average of 32% of their disposable incomes on paying the mortgage, according to the Halifax.

Nevertheless, prices themselves went up. The average first-time buyer paid £171.9k in 2014, a 9% rise on the previous year.

About 80% of those taking advantage of the government’s Help to Buy scheme are purchasing their first property.

Help to Buy enables people to put down a deposit for as little as 5% of the selling price.

Halifax mortgages director Craig McKinlay told Sky News: “First-time buyers are vital for a properly functioning housing market.

“Improving economic conditions and rising employment levels have boosted confidence among those thinking about getting on to the housing ladder for the first time, contributing to the significant increase in the number of first-time buyers in the past two years.”

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