The number of first time buyers has risen for the sixth consecutive year to 359,900 with deposits doubling in the past decade.
Data from the Halifax shows the number of first time buyers taking the first step on the property ladder has increased 6% in the last year reaching 359,900 in 2017.
average prices of a typical first home have grown by 21% from £174,703 back in 2007 to £212,079 with first time buyer numbers returning to previous levels.
This has been an upward trend for the past six years despite the average deposit increasing from £17,740 a decade ago to £33,339, an increase of 91%.
There has also been an increase in home movers up 2% in 2017 to 370,300 with an average price paid for a property at £296,731.
Fewer buyers in Greater London
The number of buyers in Greater London have not recovered to the levels in 2007 when they were 57,900 and are 26% lower with 42,983 a decade later although the numbers are higher than the 36,800 during 2012.
The number of buyers and the average deposits for 2017 from the Halifax data are shown below.
| Region | Buyers in 2017 | Average deposit |
|---|---|---|
| Greater London | 42,983 | £112,604 |
| South East | 68,400 | £51,457 |
| South West | 28,500 | £36,289 |
| East Anglia | 12,200 | £35,463 |
| West Midlands | 29,300 | £25,378 |
| East Midlands | 26,500 | £24,462 |
| North West | 35,400 | £22,148 |
| Scotland | 31,600 | £21,460 |
| Yorks and the Humber | 27,700 | £20,678 |
| Wales | 14,800 | £18,596 |
| North | 14,900 | £18,435 |
| Northern Ireland | 8,100 | £17,636 |
The number of first time buyers is 87% higher than the all-time low of 192,300 recorded in 2008 and is now just 11% below the recent peak of 402,800 in 2006.
Average deposits are also higher with Greater London leading the way with £112,604 followed by the South East on £51,457 and the South East just above the national average with £36,289.
Outside of London the largest increase for deposits is the South East increasing 157% to £51,457 where the house price has increased from £199,894 in 2007 to £278,749.
For remortgage buyers the increase in house prices gives them an opportunity to release capital which they can use to improve their home.
First time buyers a greater segment
About half of all house purchases with a mortgage are first time buyers compared to 36% a decade ago although this may be higher with the 43% drop in the proportion of home mover numbers.
Russell Galley, Managing Director of Halifax said, A flow of new buyers into home ownership is vital for the overall wellbeing of the UK housing market.
Low mortgage rates, the high level of employment and government schemes such as Help to Buy has helped first time buyers become a much greater segment of the market.
The Help to Buy scheme for equity loans is for both first time buyers and home movers requiring a 5% deposit and government loan of up to 20% of the property value with a mortgage from a lender for the 75% balance.
The abolition of Stamp Duty on purchases valued up to £300,000 is likely to stimulate growth by reducing the upfront cost of buying your first home, says Mr Galley.
This is in contrast to the slowdown in new purchases for buy-to-let investors after changes to stamp duty and taxation allowance on mortgage interest make it less attractive to buy.
In London the average price paid by a new entrant to the property market has increased from £287,678 in 2007 to the current property value of £422,580.
Property is an important asset for retirement as equity release buyers can access the wealth in their home using a lifetime mortgage to maintain your standard of living as costs rise or pay for care at home.
What are your next steps?
Call our LCM mortgage brokers for advice if you are a first time buyer, want to remortgage your existing home for the best mortgage deal, moving home or are a buy-to-let investor.
For equity release buyers our London City Mortgage advisers can recommend lifetime mortgages allowing you to receive cash from your property to pay university fees for grandchildren or even reduce inheritance tax owed by your beneficiaries.
Learn more by using the property value tracker chart, mortgage costs calculator and equity release mortgage calculator. Start with a free mortgage quote or call us and we can take your details.
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