Housing market research by the Nationwide Building Society has concluded that:
* First time buyers still account for almost 40% of house purchase transactions
* Only about 20% of homeowners are in the 20-24 age group, compared to around 30% ten years ago
* Deposits and income multiple constraints are a bigger hurdle for 'true first-time buyers' than debt servicing costs
* Less than 10% of 22-29 year olds can overcome lending income multiple constraints
* Young Teachers, Nurses and Policemen cannot afford to buy alone - especially in London
Commenting on the research Fionnuala Earley, Nationwide's Group Economist, said: "First-time buyers are often heralded as the main driver of the housing market. Injecting brand new demand, they add liquidity and help to support house prices. The proportion of first-time buyers in the market has been falling over time, but, given the rapid rise in house prices, the resilience of this group is perhaps a little surprising. Remarkably, first-time buyers still account for almost 40% of all house purchase transactions in the UK.
The answer to this puzzle lies in the types of homebuyer that fall into the first-time buyer category. No longer can we think of first-time buyers as the fresh-faced young person, or couple, getting their very first foot on the housing ladder after saving hard for a deposit. Rather the category includes a significant proportion of buyers returning to the market, perhaps after a spell in rented accommodation or moving from dissolving households. These buyers differ from the stereotypical picture of a first-time buyer as they tend to be older and thus on higher incomes. More importantly however, such buyers often have access to deposits funded from past increases in house prices which ease them back into the market. In 2005 'returners' may have accounted for up to 20% of all first time buyers."
