Numbers of first time buyers have reached 372,000 accounting for the majority of home purchases since 1995, says Halifax.
The number of first time buyers reached 372,000 in 2018 according to a report by the Halifax, accounting for the of homes purchased for the first time for 23 years.
First time buyers represent more than 50% of all purchases with a mortgage compared to 38% a decade ago with the average house price rising from £153,030 to £212,473 over this period.
Average deposits have increased 57% from £21,133 to £33,252 over the same period and in London this has increased significantly from £32,841 to £110,656.
The remaining property market purchases with a mortgage are made up of home movers, remortgage buyers and buy-to-let investors.
New buyers almost doubled since 2008
After the financial crisis in 2008 the number of first time buyers reduced to 192,300 and this has increased for seven consecutive years by 92% to 372,000.
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, making it less attractive to buy.
Russell Galley, Managing Director Halifax said, new buyers coming on to the ladder are vital for the overall wellbeing of the UK housing market despite a shortage of homes and the ongoing challenge of raising a deposit.
The following table from the Halifax shows house mortgage and deposit for first time buyers in different regions in 2018.
| Region | Average mortgage | Average deposit |
|---|---|---|
| Greater London | £316,202 | £110,656 |
| South East | £227,213 | £52,136 |
| South West | £173,071 | £37,128 |
| East Anglia | £174,263 | £36,611 |
| West Midlands | £148,395 | £26,513 |
| East Midlands | £140,608 | £24,791 |
| North West | £127,640 | £21,449 |
| Scotland | £121,719 | £19,952 |
| Yorks & Humberside | £122,811 | £19,827 |
| Northern Ireland | £111,538 | £18,077 |
| North | £108,991 | £17,112 |
| Wales | £128,094 | £16,449 |
First time buyers spend the most in London where the average property value is £426,857 placing a deposit of 26% or £110,656.
Mortgages in the capital average £316,202 for 2018 and the number of purchases have increased from 27,900 a decade ago to 43,500.
In Wales the average property value is £144,542 with a deposit of 14% or £16,449 compared to the average deposit for the UK of £32,841.
For older homeowners in London, the considerable value in their property allows the equity release buyer to access wealth using a lifetime mortgage for home and garden improvements or help your children start or expand a business.
Large variations in affordability
Nine of the top ten least affordable local authority districts are in London following the 50% growth in first-time buyer prices in the five years to 2018, compared to 36% nationally.
The district of Brent leads the table with first time buyer property prices of £500,088 which is 13.3 times the local average annual earnings for that area.
Next is Hackney with a ratio of 11.8, Newham on 11.0 and the only district outside the capital is Oxford with the average first-time buyer property price of £400,730 and ratio of 10.9 times.
Without family help to upsize, the only option for many home movers in Greater London is to stay in their existing home and continue saving more for a bigger deposit.
The most affordable local authority districts are the North West where first time buyers need a deposit of £21,449 and Scotland requiring a deposit of £19,952.
Pendle in Lancashire is the most affordable local authority district with an average property price of £88,852 and is 2.6 times the local average gross annual earnings.
Continued low mortgage rates, reduction in Stamp Duty and the government’s Help to Buy scheme for equity loans have assisted people taking their first step on to the property ladder.
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 a buy-to-let investor.
Start with a free mortgage quote or call us and we can take your details. Learn more by using the property value tracker chart, mortgage costs calculator and equity release calculator.
For equity release buyers our London City Mortgage advisers can recommend lifetime mortgages allowing you to receive cash from your property to consolidate debt or reduce inheritance tax owed by your beneficiaries.
