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First-time buyers ‘on the increase’

First-time home buyer numbers reached a five-year high in 2012

First-time home buyer numbers reached a five-year high in 2012

First-time home buyer numbers in the UK reached a five-year high in 2012, helped by improvements in affordability, a study has found.

However, the average age of a first-time buyer has increased to 30, from 29 a year ago, and the typical deposit required is 20 per cent, compared with the deposit of around 10 per cent put down in 2007, Halifax found.

Around 216,000 people took their first step on the property ladder in 2012, showing a 12 per cent year-on-year increase and making up two fifths of all house purchase loans.

While this is the highest number since 2007, it is still almost half the 402,800 first-time buyers who bought their first home in 2006.

Halifax said that improved mortgage affordability was a factor behind the recent increase. A new first-time buyer spends around 27 per cent of their disposable income on their mortgage payments, which is comfortably below the long-term average of 34 per cent.

However, the average house price paid by a first-time buyer increased slightly to £139,921 in 2012 - representing a 3 per cent rise compared with 2011.

Halifax found that the average price paid by a first-time buyer in November was affordable for someone on average earnings in 39 per cent of local authority districts in the UK, compared with just 5 per cent in 2007. Homes were classed as affordable if they cost less than four times typical local earnings.

Stirling in Scotland was named as the most affordable district, where house prices are around two and-a-half times earnings.

At the other end of the scale, first-time buyers in Camden, London, face buying a home which costs nine times the average wage.

 
 
 

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