FTB figures lowest since 1980
Despite the number of FTBs showing a slight increase towards the end of 2005, the overall number of FTBs fell 10 per cent on 2004 levels from 358,000 to 320,000.
The Halifax survey also highlighted the average FTB now takes five years to save for a deposit, with the typical amount put down now £23,967, the equivalent of 76 per cent of average yearly earnings.
Tim Crawford, group economist at Halifax, commented: “First-time buyers need to save harder and for longer than ever before so as to put down a decent deposit on a house. This explains why the number of FTBs entering the market was close to record lows in 2005.”
The average price paid by FTBs for their first property also continued to rise. The biggest rise in 2005 came in Northern Ireland, where the average house price paid by a FTB rose 16 per cent during 2005 to £102,203.
Ken Sives, IFA at Sives Financial Services, isn’t surprised by the price rise. He said: “While prices in Northern Ireland have been behind the rest of the UK, they are catching up again and to say the average house price will grow another 10 per cent in 2006 I think is being conservative.”
Mark Sismey-Durrant, chief executive of Heritable Bank, believed the problems FTBs face won’t improve in the short-term. He said: “The future for FTBs looks tough as the natural price floor will only fall so far before the gap is filled by other people who are currently just unable to buy a property. We may have to see a return to 100 per cent-plus lending to help these people plug the gap and get on the ladder.”