First-time buyers are paying more than ever before to get a foot on the property ladder, new research shows. According to the latest Halifax First Time Buyer Review, the average house price paid by first-time buyers is now £207,693 – the highest on record. In London it is even worse, with the average price of […]
First-time buyers are paying more than ever before to get a foot on the property ladder, new research shows.
According to the latest Halifax First Time Buyer Review, the average house price paid by first-time buyers is now £207,693 – the highest on record.
In London it is even worse, with the average price of a first-time buyer property skyrocketing by 66% to £409,975 since 2012.
Not only is the average price in London three and a half times higher than in Northern Ireland – where first-time buyers pay £115,269 – it is also 48% higher than the second most expensive region, the South East at £276,773.
Average mortgages and deposits by region
| Average house price | Average Mortgage | Average deposit | Deposit as % of purchase price | |
| North | £125,591 | £106,998 | £18,594 | 15% |
| Yorkshire and the Humber | £137,908 | £118,059 | £19,848 | 14% |
| North West | £146,551 | £125,169 | £21,382 | 15% |
| East Midlands | £158,021 | £134,274 | £23,747 | 15% |
| West Midlands | £164,737 | £139,911 | £24,826 | 15% |
| East Anglia | £198,876 | £165,738 | £33,138 | 17% |
| Wales | £136,103 | £118,910 | £17,193 | 13% |
| South West | £202,700 | £167,045 | £35,655 | 18% |
| South East | £276,773 | £226,628 | £50,144 | 18% |
| Greater London | £409,795 | £303,218 | £106,577 | 26% |
| Northern Ireland | £117,716 | £101,259 | £16,457 | 14% |
| Scotland | £139,041 | £117,476 | £21,565 | 16% |
| UK | £207,693 | £174,795 | £32,899 | 16% |
Sources: Halifax, CML
The average first-time buyer deposit was £32,899 in the first six months of 2017 – 16% of the purchase price.
Not surprisingly, the largest deposits being put down are in London, more than three times the national average of £106,577, whilst Northern Ireland is half the UK average (£16,457).
The number of first-time buyers reached 162,704 in the first six months of 2017 – up from 154,200 in the same period in 2016.
Ten years ago, just 36% of all house purchases financed by a mortgage were made by first-time buyers. In 2017, this proportion is estimated to have risen to 47%, with the share growing from 44% since the launch of the Help to Buy scheme in April 2013.
Along with rising house prices, there has also been a growing trend in longer mortgage terms than the more traditional 25-year term.
In 2007, nearly half (48%) of first-time buyers had a mortgage term of between 20 and 25 years, whilst 38% were for between 25 and 35 years. In 2016, this mix has markedly reversed, with 56% of mortgages at a term of 25 to 35 years or more, while the 20 to 25-year mortgage terms have fallen to 26%.
The 10 least affordable local authority districts for first-time buyers are all in London. The least affordable is Brent where the average first-time buyer property price of £459,499 is 12.5 times gross average annual earnings in the area.
Stirling in Scotland is the most affordable local authority district in the UK with an average property price of £136,181 – 2.9 times local annual average gross earnings. Copeland in the North West is the most affordable in England.
Martin Ellis, housing economist at Halifax, said: “Although the number of first-time buyers grew at a slower rate in the first half of the year compared to 2016 the levels remain healthy and the market is achieving record average house price for first-time buyers.
“For the third time in four years the numbers getting on the housing ladder have exceeded 150,000 – a level of momentum not seen since before the financial crisis.
“High levels of employment, low mortgage rates and government schemes such as Help to Buy have also helped these numbers remain robust, as first-time buyers continue to form a fundamental part of the UK housing market.”
Least affordable regions for first-time buyers
| Local Authority District | Region | House Price to Average Earnings ratio |
| Brent | London | 12.5 |
| Lambeth | London | 12.0 |
| Haringey | London | 11.9 |
| Camden | London | 11.8 |
| Hackney | London | 11.6 |
| Waltham Forest | London | 11.4 |
| Newham | London | 11.4 |
| Harrow | London | 11.3 |
| Ealing | London | 10.9 |
| Southwark | London | 10.9 |
Source: Halifax
Most affordable regions in the UK for first-time buyers
| Local authority district | Region | House price to Aaerage earnings ratio |
| Stirling | Scotland | 2.9 |
| Inverclyde | Scotland | 3.2 |
| Renfrewshire | Scotland | 3.2 |
| Copeland | North West | 3.2 |
| West Dunbartonshire | Scotland | 3.3 |
| East Ayrshire | Scotland | 3.3 |
| Pendle | North West | 3.3 |
| North Ayrshire | Scotland | 3.4 |
| North Lanarkshire | Scotland | 3.4 |
| Lisburn and Castlereagh | Northern Ireland | 3.5 |
Source: Halifax
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