In recent years, a series of government-led initiatives have been introduced to help people take their first step on the property ladder. As a result, first time buyers have become an increasingly important buyer segment for new build homes.
According to UK Finance, first time buyers were responsible for more than 50% of all new residential mortgages issued across the UK in the first quarter of 2018. This translates to 81,000 mortgages with a value of £13.2bn, a 6% increase on the first quarter of the previous year.
Last year around 365,000 first time buyers completed on a mortgage, which was the highest number since 2006. In a new report, Savills said that first time buyers of new homes have increased their share of the market by 4% during the past two years. But as the number of loans to first time buyers has increased, so has the income multiple, as people increasingly stretch themselves to get onto the ladder.
Since 2009, the average income multiple for a first time buyer mortgage has increased 16% from 3.1 times the average income to 3.6 times. According to UK Finance, the average household income for a first time buyer is now £41,760, which means that the average first time buyer spends around £150,000.