First time buyers now make up over half of the market in the UK with new research showing that the most affordable areas for them are Pendle in Lancashire and Stirling in Scotland.
People buying their first home account for 51% of sales and their number has increased by 21% since 2008, reaching the highest level for a decade, according to new research from lender the Halifax.
The research also shows that first time buyers pay an average of £208,741, some 21% more than the £172,659 paid in 2008 and Brent in London is the least affordable location for those stepping onto the housing ladder.
But they are older and the average age of a first time buyer is now 31, two years older than a decade ago, and they need to save up for a deposit amounting to £33,127 on average as the average price of first time buyer properties has out-performed the overall housing market.
In London, the average first-time buyer property price has seen the greatest increase at 48% during the last 10 years to £419,608, followed by the South East with a rise of 37% to £275,632 and East Anglia up 30% to £210,639.
There were relatively modest price rises in the North of 8% and in Wales 9% while in Northern Ireland the average first time buyer price is a third lower, down 33% to £124,035 and the lowest in the UK.
First time buyers are now putting down record deposits for their first home. Nationally the average deposit is £33,127, an increase of 71% from £19,364 in 2008. In London, the average first time buyer deposit is £114,952, some 27% of the purchase price, and a three-fold increase from £38,335 in 2008.
However, owning their own home remains a dream for many young people but half of 18 to 34 year olds think it’s harder than ever to get on the housing ladder and almost one in five say they believe they’ll be renting for ever.
Older renters are less hopeful than younger ones at owning a home as 26% of 31 to 34 year olds say they’ll never be able to buy a home and a third think the only way they’ll get on the property ladder is by inheriting the cash, while 16% would consider upping sticks and moving abroad because of high UK property prices.
Parents hoping to downsize once the kids have flown the nest may have to wait longer than they’d anticipated with 35% of 18 to 34 year olds intending to stay at home until they can afford to buy.
The research also shows that the number of first time buyers increased by around 3% in the first six months of 2018 to 175,500 compared with 171,200 in the same period in 2017.
Whilst the rate of growth has slowed, this is the sixth increase over a comparable period in the last seven years and the third consecutive year that first time buyer numbers have topped 150,000.
Meanwhile, the number of first time buyers has more than doubled since dropping to a record low of 72,700 in the first half of 2009, and is now just 8% lower than at the peak of the last boom in 2006 when it was 190,900.
‘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,’ said Russell Galley, Halifax managing director.
‘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,’ he added.
