Number of first-time buyers rises 35% in a year, says Halifax 1

Number of first-time buyers rises 35% in a year, says Halifax

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The number of first-time buyers has reached record levels in the midst of runaway house prices.

Numbers are up 35 per cent, from 303,970 in 2020 to 409,370 in 2021, according to the annual study by Halifax.

And for the first time, the typical age of a buyer is 30-plus in every region. 

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The higher levels come at a time when first-time buyers are having to balance saving up as much as they can for a deposit while trying to get onto the property ladder in a red hot market.

The number of first-time buyers in Britain has reached a record level, according to Halifax

The number of first-time buyers in Britain has reached a record level, according to Halifax

NUMBER OF FIRST-TIME BUYERS FROM 2009 THROUGH TO 2021
Number of first-time buyersAnnual % changeFTBs as % of all house purchases loans
2009193,94039%
2010193,5900%37%
2011187,990-3%38%
2012211,92013%40%
2013258,21022%44%
2014310,28020%46%
2015298,090-4%46%
2016328,50010%48%
2017345,9205%49%
2018353,1202%50%
2019351,260-1%51%
2020303,970-13%50%
2021*409,37035%48%
Sources: UK Finance and *Halifax estimate for 2021  

The average price of a home in Britain rose £24,000 last year to £276,091.

All regions across Britain saw a marked rise in the number of first-time buyers, with the biggest increase being in London where numbers rose 49 per cent.

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The smallest increase was in Scotland, but even in this region, numbers rose by a quarter.

The number of first-time buyers has more than doubled over the last 10 years in every region except London.

There has been a 118 per cent increase since 2011, up from 187,990 first-time buyers that year.

NUMBER OF FIRST-TIME BUYERS ACROSS DIFFERENT REGIONS
Region201120202021*10-year change1-year change
North8,37013,89018,422120%33%
Yorkshire and the Humber15,01025,07032,792118%31%
East Midlands12,78023,11029,850134%29%
East Anglia6,75011,01014,640117%33%
Greater London31,29038,14056,85782%49%
South East36,63061,25085,666134%40%
South West14,67024,25032,017118%32%
West Midlands14,74025,57033,798129%32%
North West18,47032,05040,748121%27%
Wales8,06012,31016,815109%37%
Scotland16,22028,74035,627120%24%
N. Ireland4,6908,57012,110158%41%
UK**187,990303,970409,370118%35%
Source: Halifax      

As more buyers entered the market, the average first-time buyer deposit fell 6 per cent for Britain.

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Halifax explained that the fall in the average deposit was set against a rise in the average purchase price of first homes, meaning that overall the gap between purchase price and deposit widened in every region.

This includes the South West where the average house prices has risen 5 per cent, from £239,434 in 2020 to £252,263 in 2021. At the same time, the average deposit in the region dropped 3 per cent in a year from £51,178 to £49,592 in 2021.

Amid lower affordability, the average age at which someone buys their first home has risen.

The average age of a first-time buyer now stands at 32, up from 29 in 2011 and is now over 30 in every region.

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Clackmannanshire has been named as one of the most affordable places for first-time buyers (pictured; the county's town of Alloa)

Clackmannanshire has been named as one of the most affordable places for first-time buyers (pictured; the county’s town of Alloa)

AVERAGE HOUSE PRICE AND AVERAGE DEPOSITS AMONG FIRST-TIME BUYERS
RegionAverage House Price 2020 (£s)Average House Price 2021 (£s)1 Yr % change in Average PriceAverage Deposit 2020 (£s)Average Deposit 2021 (£s)Deposit as % of purchase price 20211 Year % change in Deposit
London488,771475,819-3%130,281115,75924%-11%
Scotland154,821166,9198%35,60737,03822%4%
South West239,434252,2635%51,17849,59220%-3%
South East322,386320,591-1%66,70660,95319%-9%
Northern Ireland147,394156,5946%29,54629,19919%-1%
Wales165,272180,3929%32,36833,62219%4%
East of England297,548303,1662%58,53155,25018%-6%
North West175,389189,5888%34,18533,98318%-1%
West Midlands204,948209,2702%41,92837,15918%-11%
East Midlands199,503210,2035%39,07737,17118%-5%
North East145,254151,8145%28,64326,76918%-7%
Yorks & Humber167,267177,6836%33,03231,21218%-6%
UK256,057264,1403%57,27853,93520%-6%
Source: Halifax       

Esther Dijkstra, of Halifax, said: ‘There were a number of factors influencing home buying decisions in 2021. 

‘While working from home and the “race for space” was key for many, particularly movers, it is clear that the Stamp Duty holiday increased the availability of first-rung homes as others moved up the ladder.

‘Lifestyles have changed. Over time more people have chosen to go on to higher education, go travelling, or move around for work, which are all factors in the increase in first-time buyer age.

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‘However, undoubtedly, the biggest drivers are the cost of homes and the need to save a significant deposit to get on the housing ladder.

‘In 2021, the increase in average house price to £264,140, combined with difficulties in raising a deposit, meant that the gap between purchase price and deposit widened in every region in the UK.’

Merton saw affordability halved: This three-bed semi-detached house between Wimbledon and Colliers Wood is for sale for £799,950 via Dexters estate agents

Merton saw affordability halved: This three-bed semi-detached house between Wimbledon and Colliers Wood is for sale for £799,950 via Dexters estate agents

AREAS WITH THE BIGGEST CHANGES IN AFFORDABILITY
Local AuthorityAverage price 12 months to Dec 2021 (£)Ave earnings 2021 est (£)P/E ratio 2021P/E ratio 2011Deterioration in affordability
Merton513,81151,8809.94.8108%
Reigate and Banstead386,71947,9298.14.197%
South Kesteven250,78836,1526.93.694%
Westminster682,36167,962105.294%
Ashford298,23935,2168.54.492%
Source; Halifax      
Pictured: Camden in London is among the least affordable locations for first-time buyers

Pictured: Camden in London is among the least affordable locations for first-time buyers

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The growth of house prices has outstripped that of incomes, with the average price of property for first-time buyers now being 6.9 times their salary.

It follows Halifax announcing earlier this month that house prices rose by £24,500 last year, with average values now standing at £276,091. 

The lender said affordability has fallen since 2011 in all but three local authorities, which are Clackmannanshire, Moray and East Ayrhsire.

Merton saw this price to earnings ratio more than double, which means that affordability halved, while Reigate and Banstead nearly doubled.

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The price of an average first-time home is now less than four times the average income – which is considered to be the limit for affordability – in only 15 local authorities around the Britain.

The least affordable local authority for first-time buyers is the London borough of Brent, where homes are 12.3 times average earnings.

By contrast, the most affordable is Clackmannanshire in Scotland, where it is only three times.

Least affordable is London's Brent where this five-bed semi-detached house is for sale for £650,000 via Drivers & Norris estate agents

Least affordable is London’s Brent where this five-bed semi-detached house is for sale for £650,000 via Drivers & Norris estate agents

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MOST AFFORDABLE AREAS FOR FIRST-TIME BUYERS
Local AuthorityRegionP/E Ratio 2021
ClackmannanshireScotland3
West DunbartonshireScotland3.2
East AyrshireScotland3.2
North AyrshireScotland3.3
RenfrewshireScotland3.5
Source; Halifax   
LEAST AFFORDABLE AREAS FOR FIRST-TIME BUYERS
Local AuthorityRegionP/E Ratio 2021
BrentLondon12.3
CamdenLondon12.2
HaringeyLondon11.4
Waltham ForestLondon10.9
HillingdonLondon10.6
Source: Halifax   

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