First-time buyer count highest since 2007

Michael Lloyd

January 29, 2018

The number of first-time buyers has gone up by 6% in the last 12 months, reaching an estimated 359,000 in 2017.

Despite this, the Halifax First-Time Buyer Review found the deposits from first-time buyers have almost doubled from the year before, rising from £17,740 in 2007 to £33,3392 in 2017, an increase of 91%.

Russell Galley, managing director at Halifax, said: “A flow of new buyers into home ownership is vital for the overall well-being of the UK housing market.

“This ten-year high in the number of first-time buyers shows continued healthy movement in this key area despite a shortage of homes and the ongoing challenge of saving enough of a deposit.

“Low mortgage rates, high levels of employment and government schemes such as Help to Buy have helped first-time buyers become a much greater segment of the market, and the recent abolition of stamp duty on purchases of up to £300,000 is likely to continue stimulating this growth by reducing the upfront costs associated with taking the first step on to the property ladder.”

Although the average price of a typical first home has grown by 21% from £174,703 to £212,079, first-time buyer levels have almost returned to those last seen in 2007, when 359,900 took their first step on to the property ladder.

This is an increase of 87% compared to an all-time low of 192,3002 in 2008 and is now just 11% below the most recent peak of 402,800 in 2006.

First-time buyers now account for half of all house purchases with a mortgage, an increase from 36% a decade ago.

In the past decade, the number of first-time buyers in London has fallen by 26% from 57,900 in 2007 to an estimated 42,983 in 2017.

The North is the only other region to see a drop in numbers, seeing numbers decline by 5% from 17,300 to 16,430 during the same period.

However, the number of people getting on the housing ladder in Northern Ireland has grown by 65% to 9,410.

The second largest rise was in the South West (16%, from 25,400 to 29,399). The South East has the largest number of first-time buyers in the UK, totalling over 69,000 last year, edging up from 67,600 in 2007.

For first-time buyers in southern England, average deposits have more than doubled in a decade. Outside London, the largest increase was in the South East, where deposits have risen by 157% to £51,457, but still make up less than half the amount being put down in the capital (£112,604).

By comparison, first-time buyers in Northern Ireland have fared the best, with average deposits dropping by 62% from £44,270 in 2007 to £16,814 – the lowest in the UK.

The average price of a typical first-time buyer home in the South East has increased (in cash terms) by £78,855 (or 39%) since 2007 – from £199,894 to £278,749 in 2017.

In London, the average price paid by a new entrant to the property market in the capital has grown by £134,902 to £422,580, which is double the national average.

House price growth in northern areas has been considerably more modest. In the last 10 years, the average price of a typical first-time buyer home in the North has grown by £9,462 to £126,437, while in Northern Ireland it has fallen £59,240 (33%) to £120,648 – the lowest in the UK.

The average age of a first-time buyer in 2017 was 31– two years older than a decade ago. In London it has grown from 31 to 33 –the eldest in the UK.

The biggest increase in age was in Northern Ireland, up by three years from 28 to 31.

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