First-time buyer numbers up 10% in H1

5th July 2016

According to the latest Halifax First Time Buyer Review, the number of first-time buyers increased by around 10% during the first six months of 2016 compared with the same period in 2015.

There were an estimated 154,200 first-time buyers during the first half of the year compared with 140,500 in the same period last year. This number was more than double the market low recorded during the first half of 2009 (72,700).

The number of first-time buyers has increased more rapidly than the number of home movers over the past few years. As a result, first-time buyers have increased as a proportion of all mortgage-financed house purchasers, from 38% in 2011 to an estimated 47% in 2016. However, the percentage has been stable over the past three years as the numbers of first-time buyers and home movers have risen at a similar pace since 2014.

The average first-time buyers deposit in May 2016 was £33,960, more than double that in 2007 (£16,400). There has been a 14% rise in the average deposit over the past year, largely reflecting the increase in house prices during that period.

The 10 least affordable local authority districts (LADs) for first-time buyers are all in London. The least affordable is Brent, where the average first-time buyer property price of £457,014 is 12.5 times gross average annual earnings in the area.

East Dunbartonshire in Scotland is the most affordable LAD in the UK, with an average property price of £97,089, 2.6 times local annual average gross earnings. Copeland in the North West is the next most affordable. Five of the 10 most affordable LADs for first-time buyers are in Scotland. 

Chris Gowland, mortgages director at Halifax, said: “There was a further increase in the number of first-time buyers in the first half of the year, with the total exceeding 100,000 in the first six months of each year since 2012. This rise has been broadly in line with a general improvement in market activity and is likely to have been helped by government measures including the Help to Buy scheme.

“Although numbers remain below their previous peaks and many potential first-time buyers are facing escalating house prices and deposit sizes, record low mortgage rates continue to make buying seem a more attractive option than renting.”