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First-time buyers accounted for 54% of all mortgaged house sales across the 12 months, confirmed the mortgage provider, with 19% more people getting on the housing ladder than across 2023.
Increase in new buyers
Halifax Head of Mortgages, Amanda Bryden, clarifies: “Last year saw a big increase in the number of first-time buyers, up almost a fifth from 2023.
“This likely reflects an improvement in mortgage affordability, as interest rates eased and stabilised, providing more certainty for those stepping on to the ladder.”
The new record high meant that the total number of people buying a property for the first time rose from 287,060 in 2023 to 341,068 in 2024. The increase in new buyers can largely be traced to the mortgage market remaining stable, with mortgage rates tending to stay between 4% and 5% for much of 2024, with rates occasionally falling lower than 4%.
Comparative stability
An example is between the beginning of July and October 2024, when the lowest five-year fixed rate mortgage deal fell from 4.28% to a low of 3.68%. At the same time, the lowest two-year fixed rate mortgage deal fell from 4.68% to a low of 3.84%.
While rates have risen since then, this comparative stability signified an improvement from the uncertainty of 2023’s mortgage market, where base rate rises and concerns over inflation combined to force rates up. During this period, Moneyfacts report that the average two-year fixed mortgage rates reached 6.86% in the summer months, while five-year rates hit a high of 6.35%.
Rising stamp duty
The impact of increasing stamp duty costs from 1 April, when the stamp duty nil-rate threshold for first-time buyers will reduce from £425,000 to £300,000, is also a factor in first-time buyer activity.
First-time buyers purchasing a property priced between £300,000 and £500,000 will soon face a 5% stamp duty charge on an extra £125,000 of borrowing, adding thousands of pounds to their overall total cost of their property.