First-time buyer numbers fall

Sarah Davidson

July 3, 2015

Research from Halifax showed 10,000 fewer people have taken a step onto the property ladder so far this year compared with 149,500 in the same period last year.

However, with the exception of 2014, it was still the highest total recorded for the first six months of the year since 2007 and was 92% higher than the market low recorded in the first half of 2009 (72,700).

Overall the proportion of first-time buyers fell in line with the rest of the market – down 7%. In the past few years the number of first-time buyers has increased more rapidly than the number of second-time buyers.

Craig McKinley, director of mortgages at Halifax, said: “There was a modest decline in the number of first-time buyers in the first half of the year following the substantial increases recorded in 2013 and 2014. This fall has been in line with the general softening in market activity.

“However, there are now signs of a pick-up in mortgage activity as the economy continues to recover and mortgage interest rates remain at very low levels. These factors could boost the number of first-time buyers during the second half of the year.”

The average deposit made by first-time buyers in May 2015 was £29,894, a 6% increase compared to May 2014 (£28,191).

This rise in the average deposit reflects the increase in house prices over the last year. The average first-time buyer deposit is now £28,191, 82% or £13,494 higher than in 2007 when it was £16,400.

With the average age of a first-time buyer up to 30 from 29 in 2011, people are waiting longer before first buying a property.

The Halifax research also showed that in 78% of local authority districts, someone earning an average wage would find it unaffordable to buy a property. However, this is an improvement as only 8% of local authority districts were affordable in 2007.

Of the local authority districts, nine of the 10 least affordable are in London, with the least affordable being Hammersmith and Fulham where the average first-time buyer has to spend £613,347 to buy a home – 11.7 times average gross annual earnings in the area.

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