New research reveals there are fewer first time buyers in the UK and they are older
Since the start of the 21st century average house prices in the UK have increased by 181% but and the number of first time buyers has fallen by 27%, new research has found.
The average first time buyer is now aged between 25 and 34 and the average savings required for a deposit are £22,689, according to the research from online estate agent Hatched.
Pendle in Lancashire and North Lanarkshire in Scotland are both the most affordable location to buy a home in terms of cost and a good ratio versus expected earnings in the area while Burnley in Lancashire is the most affordable location with an average price of £70,311.
The research was sparked by a prediction from PwC that London will become a city of renters by 2025, with only 40% owning their own home. In 2000 some 60% of Londoners owned a house, either with a mortgage or outright but there has been substantial change since then.
Today, first time buyers in the UK can expect to pay £211,000 on average for their first home compared to 2000 when the average spend was £75,000 and consequently the number of first time buyers has decreased by 27% from 464,000 in 2000 to 335,750 in 2016.
As expected, London locations make up the least affordable places for first time buyers, with the house price versus earnings ratio at an average of over 10 times. Property prices for the top 10 least affordable locations ranged from £520,547 in Hackney up to £1,311,684 in Kensington and Chelsea.
A breakdown of the figures show that after Burnley the next most affordable place for first time buyers is East Ayrshire in Scotland with an average price of £74,687, followed by Blaenau Gwent in South Wales at £75,442, Pendle at £76,432, then the Outer Hebrides in Scotland at £77,523, and North Ayrshire at £82,162.
‘The fact that the number of first time buyers has been steadily decreasing since the start of the millennium might be due to the increasing difficulties people face when trying to become homeowners. These difficulties are typically around property availability and suitability, lending and help to buy, and of course the overall price aspect,’ said David Martin, chief operating officer at Hatched.
‘The younger generations, particularly millennials, are especially being hit by these barriers, and are either having to stay at home with parents for longer or find themselves falling into generation rent,’ he pointed out.
‘However, first time buyers are now experiencing decreased competition from buy to let investors, as new tax changes have been enforced earlier this year, and so it could be the optimal time to look to buy your first property,’ he added.