Fewer people have managed to get on the first rung of the property ladder so far this year as compared to 2014, according to the latest Halifax First-Time Buyer Review.
The latest figures show there were 139,500 first-time buyers in the first six months of 2015, down 7 per cent from 149,500 in the same period of 2014.
Although the number of new homeowners has shrunk, they account for almost half (47 per cent) of all mortgage-financed house purchases. With the exception of the first half of 2014, this is the highest total for the first six months of the year since 2007. This is also 92 per cent higher than the record low from 2009, when there were only 72,700 first-time buyers in the first six months.
The number of first-time buyers has increased more rapidly than the number of subsequent buyers over the past few years, from 38 per cent in 2011 to 47 per cent in 2015, Halifax says.
The average deposit for a first-time buyer has increased 6 per cent to £29,8942 in May 2015 from £28,191 in May 2014. This is largely due to the rise in property prices over the period.
The average deposit, as a proportion of the purchase price, has fallen from 20 per cent in 2013 to 17 per cent in 2015. Still, it is far higher than in 2007 when it was 10 per cent.
The recent changes to the stamp duty system have saved the average first-time buyer £716. Savings for the average first-time buyer in London are much bigger than this with a reduction in the stamp duty bill for the average first-time buyer property in the capital of £3,154 (from £10,269 to £7,115).
The average price paid by first-time buyers increased by 8 per cent over the past year from £165,829 to £178,370.
The average age of a first-time buyer is now 30 years old, up from 29 in 2011.
There has been an increase in the proportion of areas that are affordable for first-time buyers since 2007. In almost a quarter (22 per cent) all of local authority districts in the UK the average house price paid by a first-time buyer in the 12 months to May 2015 was affordable for someone on average earnings. This compares to the peak of the market in 2007 when just 8 per cent of local authority districts were affordable.
Craig McKinlay, mortgages director at Halifax, commented:
“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.
“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.”
