Where are all the first time buyers?

Tue 12 Jan 2016 by Cordelia O

Written by Cordelia O

First-time buyer numbers fall for the first time in four years

Mortgage lender Halifax has confirmed that the number of first-time buyers in the housing market has fallen, for the first time since 2011.

This follows research from this time last year (BBC), revealing that first-time buyers were at their "highest level since 2007".

Why are the numbers changing?

The dip in first-time buyer numbers is in line with overall house purchases, with Halifax suggesting that the lack of homes is a contributing factor.

Another factor could be the increased ability for first-time buyers to get a mortgage, and get on the property ladder, since 2007. At least one in four people are opting for longer mortgage terms, meaning enhanced flexibility and affordibility for monthly payments.

House prices don't help

However - although low mortgage rates are currently helping first-time buyers get on the ladder, the rise in house prices are likely to stop many from being able to make an initial offer. The average price paid by first-time buyers jumped by 10% last year to just over £190k, compared to a previous peak of just under £175k in 2007.

When looking at the average cost for a deposit, first-time buyers put down an average of £32,927, which is a big difference to the average of £17,499 in 2007.

...and affordability is less likely in London

In the capital, prices are inflated, with first-time buyers typically paying close to £368k for their first property. As many people flock to the capital to start their careers, it is looking far more affordable to rent there or buy elsewhere and commute in.

Don't lose hope!

There are still affordable areas for first-time buyers in the UK, you just have to look a little further afield. Scotland seems to be the place to start, with homes in Inverclyde typically costing just 2.8 times average earnings.

Deposits are at an all-time high

The Daily Mail reports that the plight of first-time buyers has reached a new level as new research suggests they now need a deposit worth £33,000 on average, while the amount they pay for a home has never been higher.

I am a home owner: how does this affect me?

The figures from this Halifax research impact everyone on the property ladder. First-time buyers represent an increasingly important part of the housing ladder, as they enable those who are looking for their second or third home to trade up.

I am a first time buyer: how does this affect me?

There are many positive findings from this research, including the fact that mortgages are now more affordable, with added flexibility of repayments. However, house prices are putting a lot of people off taking that first step to getting on the property ladder.

If you have made an offer on a property, or are selling your house, why not get a conveyancing quote here?