First-Time Buyers Taking Most Mortgages

Research by the Halifax bank has found that first-time buyers now make up the majority of home purchases bought with a mortgage in the UK.

According to the bank, the last time that this was the case was 1995, almost 25 years ago.

They said that in 2018 first-time buyers accounted for just over half of all sales with a mortgage.

What did the research find?

Halifax’s First Time Buyer review found that Pendle in Lancashire and Copeland in Cumbria were the most affordable areas, with the average home costing around 2.6 times local earnings.

The third most affordable area was East Ayrshire in Scotland, where homes are at three times local gross earnings.

The least affordable area was identified as Brent, in north-west London, with property prices for first-time buyers at 13.3 times local earnings. Hackney and Newham, two other areas of the capital, followed this.

The review is based on figures from Halifax’s own house price database, earnings figures from the Office for National Statistics, and figures from industry group UK Finance.

First-time buyer figures in the UK have increased from 192,300 in 2008 to 372,000 in 2018, although numbers in Scotland and Wales have fallen.

According to the research, the home of choice for first-time buyers was a terraced house, followed by a semi-detached property, although this is likely due to budget restrictions

How much money is required?

The research also found that to get on the housing ladder an average deposit of £32,841 is required, although in London first-time buyers will need to find £110,656.

The average price of a typical first home has jumped 39% between 2008 and 2018, with the price rising from £153,030 to £212,473.

In the north east of England or Northern Ireland, a first-time buyer would be close to being able to buy a house outright for the same amount of money needed to raise a deposit in London, where the average price paid by a first-time buyer was £426,857.

Compared to an average price of £126,104 in the north east of England, and £129,615 in Northern Ireland.

Response

Managing director at the Halifax bank, Russell Galley, said that this continued growth in first-time buyers came despite the ongoing challenge of raising a deposit and a shortage of homes.

Director of mortgages at UK finance, Jackie Bennett, said that the market has been boosted for first-time buyers by competitive mortgage deals and government schemes such as Help to Buy, whereas the previously dominant buy-to-let market has been “dampened” by tax and regulatory changes.

Further information

We’ve put together some top tips for first time buyers, you can also find out more about buying your first home in our property and conveyancing section.

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