They make up 47% and are having to find a 6% higher deposit than a year ago but save when it comes to Stamp Duty, especially when buying in London, the study from the Halifax shows.
Overall there were an estimated 139,500 first time buyers in the first six months of 2015, a 7% fall compared with the same period in 2014 and although this is the first annual decrease on this basis since the first half of 2011, it is still the highest total for the first six months of the year since 2007 and was 92% higher than the market low recorded in the first half of 2009.
And despite the decline in purchases by first time buyers this year as a proportion of all mortgage financed house purchasers the proportion remains steady. Indeed, the number of FTBs has increased more rapidly than the number of subsequent buyers over the past few years, from 38% in 2011 to 47% in 2015.
The average first time deposit in May 2015 was £29,894, 6% higher than in May 2014 and the report explains that this largely reflects the increase in house prices over the past year. The average first time deposit is now 82% or £13,494 higher than in 2007.
Recent changes to stamp duty have saved the average first time buyer £716, reducing the tax bill for someone buying the average priced of £178,370 from £1,783 to £1,067. Savings for the average first time in London are much bigger than this with a reduction in the stamp duty bill for the average first property in the capital of £3,154.
‘There was a modest decline in the number of first time buyers in the first half of the year following the substantial increases recorded in 2013 and 2014. This fall has been in line with the general softening in market activity,’ said Craig McKinlay, Halifax mortgages director.
‘However, there are now signs of a pick-up in mortgage activity as the economy continues to recover and mortgage interest rates remain at very low levels. These factors could boost the number of first time buyers during the second half of the year,’ he added.
The research also shows that the average price paid by first time buyers increased by 8% over the past year from £165,829 to £178,370, some 9% higher than in 2007 while in Greater London it is £342,313, more than £100,000 higher than the next most expensive region, the South East at £225,383. Northern Ireland is the least expensive region in the UK for a first time buyer with an average price of £104,240.
The average deposit, as a proportion of the purchase price, has fallen from 20% in 2013 to 17% in 2015. It, nonetheless, remains significantly higher than in 2007 when it was 10%.
First time buyers in Greater London put down the largest average deposit, at £81,680 while those in Northern Ireland put down the smallest average deposit, at £16,011.
The average first time buyer is now aged 30, up from 29 in 2011. Regionally, the average age of a first time buyer is highest in London at 33 years old. More than six in 10 first time buyer purchases are above the £125,000 Stamp Duty threshold and nationally 45% of properties bought by first time buyers are priced between £125,000 and £250,000 with only 16% above £250,000.
There are, however, considerable regional differences with 66% of first time buyers in Greater London paying more than £250,000 and all first time buyers in the city liable for stamp duty.
