The number of first-time buyers is likely to be at the upper end of a range of 360,000 to 430,000 a year for the next few years, according to new research from the Council of Mortgage Lenders.

But these figures may be understated, as the data is skewed, said the CML

The research, published at a CML conference on first-time buyers, reveals that around 20% of so-called first-time buyers are, in fact, "returners" who were previously home-owners but temporarily left owner-occupation, for example following a relationship breakdown.

"Returners" tend to have different characteristics. In particular, they may have higher deposits and may also tend to be older than "true" first-time buyers. The fact that they are included within first-time buyer data probably means that the affordability constraints facing "true" first-time buyers are understated within the available surveys.

The research report, Understanding first-time buyers, shows the level of home-ownership among home-owners aged up to their late-30s looks set to remain lower than in the past, even if affordability constraints ease. This is probably as a result of changed lifestyle expectations and the fact that the triggers to buying a home (such as settling down with a partner or having children) now tend to be happening later in life.

The research finds evidence that younger households have moderated their expectations about when they will become home-owners. But home-ownership remains the long-term preference for around 80% of young households. In the end, this may actually prove to be good for the long-term health of the housing market and the sustainability of home-ownership. Demographic factors suggest that the decline in first-time buyers is unlikely to worsen, although the affordability constraints facing young households remain very real.

Schemes to increase the availability of low-cost home-ownership are relevant in the context of these market conditions. Yet participants in the focus groups had some fairly negative perceptions of these schemes, although their views softened when the details of how the schemes operate were explained. The marketing and promotion of these schemes therefore needs careful consideration.

In conclusion, the CML report identifies several important implications for both lenders and government. The tendency for young people to rent for longer, and the relatively high level of tenure-switching, are features of the market that should be considered when formulating housing policy. Supporting and facilitating moves between tenures - for example, by further developing an intermediate tenure - could help to maintain a healthy market in the future, and need the involvement of both the private and social sectors. For lenders, another challenge is how to move even further beyond the existing suite of first-time buyer-friendly products.

Commenting on the new research, CML Deputy Director General Peter Williams said:

"Both hard survey data and opinion research point to younger households continuing to rent for longer and becoming home-owners later. This is not necessarily a problem for the housing market, and could even result in a more stable market over time."