The number of first time buyers in England has not changed in the last 10 years, but numbers are down on 20 years ago, according to the latest research.
The survey, published by the Department of Communities and Local Government (DCLG) reveals that today’s first time buyers are older, more likely to live in a rented home before buying and need more help saving for a deposit.
In 2015/2016 there were 654,000 first time buyer households in England, amounting to around 4% of all households and 5% of all owner occupier households, the first time buyer survey shows.
The overall number of first time buyers decreased from 922,000 households in 1995/1996 to 675,000 households in 2005/2006, and has remained at around that level since.
The research also shows that compared with a decade ago, today’s first time buyers are older, more likely to buy with a partner, and to have dependent children.
In 2015/2016, the average age of first time buyers was 32, up from 31 in 2005/2006. Some 21% of first time buyers were aged between 35 and 44 years in 2015/2016, up from 16% in 2005/2006.
Some 74% of first time buyers were couple households, a marked change since a decade before when it was 66%. The report suggests that this may be due to an increasing need for two incomes to be able to buy.
Over the same period, the proportion of first time buyer households with dependent children increased from 23% to 37% and the report points out that first time buyers are increasingly likely to live in privately rented accommodation before they buy.
Indeed, the proportion of first time buyers who lived in the private rented sector before buying their first home has increased from 39% in 1995/1996, to 49% in 2005/2006 and to 66% in 2015/2016.
By contrast, over the same period, the proportion of first time buyers from the social rented sector decreased from 12% in 1995/1996 to 7% in 2005/2006, to 4% in 2015/2016.
The survey also confirms that first time buyers have higher incomes and more help with funding their deposits than they had 20 years ago. The median income of first time buyers has increased more than the median income of other recent buyers in the last 20 years.
Some 66% of first time buyers were in the two highest income bands in 2015/2016. The proportion of first time buyers in the highest income quintile has increased from 24% in 1995/1996 to 33% in 2015/2016.
Between 1995/1996 and 2015/2016, there was an increase in the proportion of first time buyers that had help from friends and family for their deposit from 22% to 29%. Two thirds of first time buyers pay a deposit for their first home of up to 20%.
But the average deposit is nearly £50,000 and higher in London. About two thirds of first time buyers, 64%, pay a deposit up to 20% of the purchase price.
In 2015/2016, the mean deposit for all recent first time buyers was £48,831 and the median deposit was £22,000. Mean deposits were higher in London at £94,088 than elsewhere where it was £40,931.
The most common source of deposit reported was savings, which has increased in importance between 2005/2006 and 2015/2016 from 66% to 81%.
