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First Time Buyers Make Up Biggest Part of UK Property Market For First Time in 25 years

First time buyers are making up the biggest part of the UK housing market for the first time in almost a quarter of a century, according to the latest Halifax First-Time Buyer Review.

The number of first-time buyers has gone up two per cent in the last 12 months, continuing an upward trend over the last seven years.

In 2018, there were 372,000 first time buyers purchasing a house accounting, for the first time since 1995, for the majority of home purchases using a mortgage. This is an increase of 38% against a decade ago, although in Scotland and Wales numbers have fallen.
Although growth in 2018 was at a slower rate than the previous two years, first time buyers overall have increased by 92 per cent from an all-time low of 192,300 in 2008.

The Halifax First-Time Buyer Review is based on figures from its own house price database, the Office for National Statistics earnings figures and mortgage lending data from industry group UK Finance.

According to the Halifax, the average price of a typical first home has jumped by 39%, from £153,030 in 2008 to £212,473 in 2018. Terraced houses, followed by semi-detached properties, were the first-time buyer’s home of choice over the past decade.

The top 10 most affordable local authority districts in the UK are all in the North West and Scotland. The most affordable are Pendle in Lancashire and Copeland in Cumbria, with an average property price of £88,852 (Pendle) and £110,930 (Copeland), 2.6 times the local average gross annual earnings.

In London, the average house price paid by a first-time buyer was £426,857. In north-east England the average first-time buyer home was £126,104 while in Northern Ireland it was £129,615. In Wales a first-time buyer spent an average of £144,542 in 2018, and in Scotland it was £141,671.

Halifax data also revealed that the average price paid for a typical first home has gone up by 39 per cent, from £153,030 in 2008, to £212,473 in 2018, and the average deposit has increased by 57 per cent from £21,133 to £33,252 over the same period.

Deposits grew fastest over the last year in the East and West Midlands, the South West and East Anglia, reflecting the continued increase in prices for first-time buyer properties.

For first time buyers, an average deposit of £32,841 will be needed to secure a mortgage, rising to £110,656 for buyers of property in London.

The average age of a first-time buyer in 2018 remains 31, two years older than a decade ago. In London, the average age is highest at 33.

Competitive mortgage deals, stamp duty exemptions and government schemes such as Help to Buy have been cited as fuelling this segment of the market, while areas such as buy to let have decreased in take up following significant tax and regulatory changes.

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