Costs for first-time buyers increases by two thirds in a decade

Property prices for first-time buyers in the UK have increased by 69% in the past decade, with the average price rising from £142,473 in 2010 to £241,025 today, according to the latest data from Halifax.

In London, the average first-time buyer property has nearly doubled in price (up 98%) to £463,536, with prices in the South East increasing by 73% to £303,838, and the East Midlands up 68% to £187,525. Halifax says that this compares to an average 60% rise for all buyer types.

When comparing this year to 2019, first-time buyer properties have seen a 7% rise, with Wales experiencing the highest rise at 9% closely followed by the North East, and Yorkshire and the Humber, both up 8% to £140,114 and £161,933 respectively. Properties in London and the South East have seen the smallest annual increase of 3%.

In regards to the number of first-time buyers, the amount has fallen by almost a third (29%) since 2019. In the first six months of 2020, there were 116,843 first-time buyers compared to 164,800 over the same period in 2019.

This decline comes despite first-time buyers making up over half (52%) of the property market, up from 38% in 2009. The share has steadily risen since the introduction of Help to Buy in 2013.

Tom Martin, mortgages director at Halifax, said: “Whilst the number of first-time buyers suffered a sharp fall during lockdown, numbers are beginning to increase as we approach the autumn, with purchases that were paused beginning to move again, and buyers making the most of the Government’s Stamp Duty changes.

“With first-time buyers in London paying almost double what they were a decade ago, yet many regions in Scotland remaining affordable, the challenges facing first-time buyers are clearly significantly influenced by where in the UK they are house hunting.”

The most expensive first-time buyer properties are found in London, where the average home costs £463,536. This is followed by the South East, where properties cost £303,838 and East Anglia, with an average property price of £228,004. The cheapest homes available for first-time buyers are reportedly in the North East, where the average property price is £140,114.

In London, the average first-time buyer deposit is more than double the national average, at £109,146. The largest deposits as a percentage of the property price can be found in London (24%), Scotland (20%), East Anglia, and the South West (both 19%). Buyers are reportedly putting down record deposits for their first home according to Halifax, averaging £47,059 in 2020, which is 25% higher than the average amount put down in 2010. However, deposits as a percentage of the property value continue to fall from their peak of 27% a decade ago, to 20% today.

The most affordable area for a first-time buyer can be found in North Ayrshire, Scotland, where the average property is 3.2 times average local earnings. A majority of the least affordable areas can be found in London, with Brent – where average first-time buyer properties cost 12.3 times the average income – being the UK’s least affordable area.

Over the past decade, the number of affordable local authority areas for first-time buyers has reduced from 120 to just 20. In the capital, Hackney has seen the greatest decrease in affordability since 2010, with house prices rising from 7.0, to 12.2 times average local earnings. This is followed by Lambeth, where prices have risen from 6.2, to 11.4 times the average salary. Middlesbrough has seen the greatest increase in affordability, with house prices falling from 4.4, to 3.9 times the average local income.