Mon 25 Jul 2016 View all news articles

Number of first-time buyers jumps 10%

The number of first-time buyers jumped 10% in the first six months of the year compared to the same period last year, new figures show.

According to the latest Halifax First-Time Buyer Review, there were an estimated 154,200 first-time buyers in the first half of 2016 compared with 140,500 in the first six months of 2015.

However, the number of first-time buyers in the first half of 2016 was nearly a fifth lower (36,700) than at the peak of the last boom in 2006.

The average first-time buyer deposit in May 2016 was £33,960 – more than double than the 2007 figure of £16,400.

There has been a 14% rise in the average deposit paid over the past year, largely reflecting the increase in house prices.

The average deposit as a proportion of purchase price has fallen from 20% in 2013 to 17% in 2016, but remains significantly higher than the 10% paid in 2007.

The average price paid by first-time buyers increased by 12% over the past year from £178,399 to £199,414.

Regionally, the average price paid is highest in Greater London (£384,617) – nearly £130,000 higher than the next most expensive region, the South East (£257,481).

Northern Ireland is the least expensive region with an average first-time buyer price of £110,675.

Unsurprisingly, the 10 least affordable local authority districts for first-time buyers are all in London.

The least affordable authority is Brent, where the average price of a property for a first-time buyer is £457,014, or 12.5 times the gross average annual earnings in the area.

East Dunbartonshire in Scotland is the most affordable local authority district in the UK with an average property price of £97,089 – 2.6 times local annual average gross earnings.

Chris Gowland, mortgages director at Halifax, said: “There was a further increase in the number of first time buyers in the first half of the year with the total exceeding 100,000 in the first six months of each year since 2012. This rise has been broadly in line with a general improvement in market activity and is likely to have been helped by government measures including the Help to Buy scheme.

“Although numbers remain below their previous peaks and many potential first time buyers are facing escalating house prices and deposit sizes, record low mortgage rates continue to make buying seem a more attractive option than renting.”

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