First-time buyer numbers have plunged by 22% between January and August this year amid tough housing conditions, a report by Halifax has revealed.
The mortgage lender’s First-Time Buyer Review showed the average age to step on the property ladder in 2023 is 32 – two years’ older than a decade ago.
Meanwhile, the report showed, the average price of a first home is now £288,030 – down 2% over the past year and the amount first-timers are putting down as a deposit has also fallen.
In fact, the average deposit has fallen by 12% but is still averaging £54,116 with inflation creating a huge barrier to first-time buyer saving power.
When it comes to locations, Scotland looks to be a prime location for first-time buyers. Halifax said it is the most affordable place for those stepping onto the property ladder with average property prices coming in at £100,000 below the UK average.
Inverclyde in West Scotland is the most affordable place in the UK whilst Newham in London is the least. This is based on annual earning versus average first-time buyer prices.
London continued to be one of the least first-time buyer friendly areas – along with the South East and East Anglia.
Indeed, the capital had the second biggest decline in first-time buyers entering the property market so far this year (-24%). The South East, meanwhile, saw the biggest fall in those buying their first home between January and August this year – there was a 25% drop.
Kim Kinnaird, director at Halifax Mortgages, which has lent £5.5 billion to first-time buyers in the first six months of the year, said: “While lenders are ready to help people get on the property ladder, the growth in house prices over the past decade means raising a suitable deposit remains a significant hurdle.
“There is then finding the right property in a housing market with limited supply, coupled with the sharp rise in interest rates more recently, meaning there is lots to consider for any first-time buyer.”
Kinnaird said whilst the average age of first-time buyers was increasing, most of those entering the property market were purchasing a home in joint names. This helped with both costs and affordability, she explained.
She added: “The expected further fall in house prices this year – alongside stronger income growth – may somewhat offset higher interest rates, which will be welcome news to many.
“Further, there are some areas which continue to be great options for first-time buyers – the average cost of a first property in Scotland, as an example, comes in at almost £100,000 less than the UK average.”
