Number of first-time property buyers slips back


The estimated number of first-time buyers slipped back in 2015 for the first time in four years as the typical deposit needed tipped over the £30,000 mark, according to a report.

In London, the average first-time buyer now needs to find around three times this amount to get on the property ladder - at more than £90,000 - the research from Halifax found.

Halifax estimated that around 310,000 people took their first step on the property ladder with a mortgage last year, edging down by 0.5% from the 311,700 people who did so in 2014.

It marks the first annual decline in first-time buyers recorded across the UK since 2011, Halifax's report said.

The decline is partly due to the lack of supply of homes for buyers to choose from, the report suggested.

And with supply shortages continuing to put an upward pressure on house prices, the average deposit a first-time buyer needed to pay in 2015 was 13% or £3,833 higher than in 2014, Halifax said.

In 2014, the typical deposit paid by a first-time buyer was £29,094, but in 2015 the average first-time deposit was £32,927.

The average price paid for a home by a first-time buyer increased by 10% in 2015 to reach £190,180, Halifax said. The average first-time buyer put down a 17% deposit.

The typical price paid for a starter home in London was £367,990, while in Northern Ireland it was £108,542.

In London, the average first-time buyer deposit put down last year was £91,409 - which was more than five times as big as the average first-time buyer deposit in Northern Ireland, at £16,578.

First-time buyers in London typically put down a deposit of around 25%, while those in Northern Ireland, who typically needed to borrow a much smaller mortgage, needed a 15% deposit on average.

In Scotland, a typical starter home cost £133,178 last year, while in Wales the average price paid was £124,817.

The research also found that people are increasingly taking on a mortgage for which they will extend their borrowing over 35 years in order to get on the property ladder, rather than the more traditional 25 year term.

In 2007, 16% of first-time buyers took on a 35-year mortgage, but in 2015 this had grown to one in four (26%) buyers in this sector.

Despite the slight drop-off in the number of first-time buyers last year, the number has grown by nearly two-thirds (60%) compared with 2011, when 193,700 people took their first step on the property ladder.

Craig McKinlay, mortgages director at Halifax, said: "Although the average price of the typical first-time buyer home has grown by 10% in the past year, the number of buyers taking that first step onto the housing ladder has been supported by favourable economic conditions; namely, record low mortgage rates, rising employment and real pay growth."

Halifax used a range of sources to make its findings, including its own data and figures from the Council of Mortgage Lenders.

Here are the average house prices and average deposits put down by first-time buyers in 2015 in cash and percentage terms, according to Halifax:

:: North, £118,254, £17,738, 15%

:: Yorkshire and the Humber, £129,326, £19,399, 15%

:: North West, £132,948, £19,849, 15%

:: East Midlands, £138,922, £21,237, 15%

:: West Midlands, £147,554, £22,753, 15%

:: East Anglia, £178,305, £33,599, 19%

:: Wales, £124,817, £18,606, 15%

:: South West, £183,408, £35,538, 19%

:: South East, £242,111, £44,024, 18%

:: London, £367,990, £91,409, 25%

:: Northern Ireland, £108,542, £16,578, 15%

:: Scotland, £133,178, £21,424, 16%