More homes were sold to first-time buyers in July 2015 than any time since the start of the financial crisis in the summer of 2007, the latest First Time Buyer Tracker from Your Move and Reeds Rains shows.
July saw 29,700 people get on the first rung of the property ladder, the highest number on record since August 2007 when there were 35,300 sales to first-time buyers.
Despite that encouraging figure, the affordability squeeze continues, the figures show.
The average first-time buyer deposit in July amounted to £27,975, a 10 per cent rise on the previous year. The cost of a deposit as a proportion of a first-time buyer’s average income reached 71.6 per cent in July, compared to 66.2 per cent a year ago.
First-Time Buyer Affordability
| Average deposit | Deposit as proportion of income | Average mortgage rate | Mortgage repayment as proportion of income | |
| July 2015 | £27,975 | 71.6% | 3.44% | 20.5% |
| June 2015 | £26,766 | 68.5% | 3.46% | 20.2% |
| 1 month change | +4.5% | +3.1 | -0.02 | +0.3 |
| 3 month change | +16.4% | +8.8 | -0.2 | +0.8 |
| 1 year change | +10.0% | +5.4 | -0.75 | -0.3 |
First-time buyers in London face the biggest challenge
London is the most expensive place for first-time buyers, with average first-time buyer house prices standing at £274,868 in the three months to July 2015. The second-most expensive place for first-time buyers was the South East, where the average house price over the same period was £201,652. Nationally, the average price for a first-time home stood at £149,713 in the three months to July 2015. The North East and Northern Ireland are the least expensive regions for first-time buyer properties, with average prices standing at £109,240 and £106,176 respectively.
On average, Londoners put down a deposit of £66,876 in the three months to July 2015 – more than five times the size of the average first-time buyer deposit in the North East (£17,659). The East of England is the region with the second-largest deposit, coming in at an average of £45,798 in the three months to July 2015.
| Region | Average Purchase Price | Average deposit | Average mortgage | Number of FTBs* |
| London | £274,868 | £66,879 | £207,989 | 13,400 |
| South East | £201,652 | £33,798 | £167,854 | 16,400 |
| South West | £199,541 | £45,978 | £153,564 | 6,200 |
| East of England | £158,962 | £20,351 | £138,611 | 2,800 |
| Wales | £153,418 | £27,903 | £125,515 | 3,200 |
| UK | £149,713 | £24,232 | £125,481 | 81,400 |
| West Midlands | £134,007 | £18,439 | £115,568 | 6,600 |
| East Midlands | £125,230 | £16,282 | £108,948 | 5,600 |
| Scotland | £119,467 | £17,714 | £101,753 | 7,000 |
| North West | £115,005 | £18,371 | £96,634 | 8,200 |
| Yorkshire & Humber | £111,914 | £14,850 | £97,064 | 6,500 |
| North East | £109,240 | £17,659 | £91,581 | 3,400 |
| Northern Ireland | £106,176 | £16,570 | £89,605 | 2,100 |
*
Adrian Gill, director of estate agents Your Move and Reeds Rains, comments: “First-time buyers are experiencing a summer of white-hot activity, unimpeded by rising deposit costs. The post-General Election bounce has given way to a more stable optimism, as first-time buyers realise that the property market – at least their end of it – is at no immediate risk of being tampered with by the Government. Rather, incentives attractive to first-time buyers – such as the Help to Buy scheme – are running along steadily, while further low-cost housing development is being encouraged to entice more people onto the ladder.
“This month’s particularly high transaction rate is also partially due to expectations that the Bank of England may announce a rate rise sooner rather than later. The thought of months of rock-bottom mortgage rates being brought to an end is encouraging many wavering first-time buyers to jump on the property ladder before repayment costs shoot up. Some may have held back briefly when considering the rising deposit costs. But real wages have been growing too, and first-time buyers are able to shoulder the short-term burden of a slightly higher deposit to spare the risk of losing out on a good mortgage deal.”
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