The numbers of first-time buyers in the UK are at their highest level in a decade, now making up 51 percent of the home-buyer market.
However, those newcomers to home ownership are paying a hefty premium for the privilege, with the cost of first-time buyer homes up a fifth (21 percent) since 2008. That’s more double the 10 percent rise on price for all buyer types.
The figures were revealed in the latest Halifax First-Time Buyer Review. Its data revealed that the average price of a first-time buyer home is now £208,741 compared to £172,659 a decade ago. Across the UK, the average price of a property for a first-time buyer is outperforming the overall housing market.
Meanwhile, the average of a first-time buyer is now 31 years old, up from 29 a decade ago, and they have to find a deposit of £33,127 to achieve their dream of owning their own place, up from £19,364 or 71 percent since 2008. However, in London, the average first-time buyer deposit is £114,952 (27 percent of the purchase price and three times as much as the 2008 deposit of £38,335.
The Halifax says the most affordable places to buy if you are new to home ownership are Pendle in Lancashire and Stirling in central Scotland. The least affordable area is Brent in north London.
The increase in both prices and deposits while wages have remained fairly stagnant is reflected in the number of buyers who only do so with financial help from family. The Halifax details the latest figures from the Office for National Statistics that show more than a third (34 percent) of new buyers get cash either a gift or a loan from parents.
The introduction of Help to Buy in 2013 has boosted first-time buyer numbers, says the Halifax, with 128,317 first-time buyers using elements of the scheme to buy a home.
Russell Galley, Halifax managing director, said: “First-time buyers are having to dig deeper than ever to get onto the property ladder. With the average price now over £200,000 and deposits at £33,000, it’s not surprising that the average age of a first-time buyer has crept up to 31.
“Despite these increases, and the concern many young people feel about home ownership, the number of first-time buyers continues to grow and is nearly back to the peak seen of 2006.
“Government measures, such as Help to Buy, and record low mortgage rates continue to make buying more financially attractive than renting, with savings of £900 a year.”
Homeward Legal is works with property lawyers with vast experience in dealing with the conveyancing required for first-time buyers, particularly those using Help to Buy. Talk to us now on 0800 038 6699 for a no-obligation, low-cost quote for first-time buyer conveyancing.