First-time buyers in UK up 10 percent

The number of first-time buyers has gone up 10 percent in the first half of 2016 compared with the same period in 2015, according to a new UK housing market report. Experts suggest record low mortgages continue to make buying more attractive than renting for those looking to get on the property ladder.

The estimated number of people buying their first home in Great Britain and Northern Ireland during the first half of 2016 was 154,200 compared with 140,500 in the same period last year.

While the new figure is more than double the lowest it reached in the previous decade (72,700 first-time buyers in 2009), it is still nearly a fifth lower than the peak of the last boom in 2006, when it reached 190,900.

House soldBuying continues being a more attractive option for first-time buyers than renting.

The report, from one of Britain’s biggest mortgage lenders, the Halifax, also notes that the average house price for first time buyers has gone up by 12 percent in the last year from £178,399 to £199,414.

Regional differences in price and affordability

However, as before, there are stark regional differences in house prices and affordability for first-time buyers.

The priciest region for first-time buyers is Greater London (average first house price £384,617), nearly 50 percent higher than the next most expensive region, the South East (£257,481).

The least expensive region for people buying their first house is in Northern Ireland, where the average first house price is £110,675, less than a third of the average first house price in London.

In terms of affordability – where house prices are compared to income – the ten least affordable areas are all in London, while five of the ten most affordable areas are in Scotland.

The ten UK local authority districts – all in London – with the least affordable houses for first-time buyers are:

– Brent (house price to income ratio 12.5)
– Hackney (12.0)
– Haringey (11.6)
– Hammersmith and Fulham (11.1)
– Waltham Forest (10.9)
– Lambeth (10.8)
– Harrow (10.6)
– Ealing (10.5)
– Newham (10.2)
– Islington (10.2)

The ten UK local authority districts with the most affordable houses for first-time buyers are:

– East Dunbartonshire, Scotland (house price to income ratio 2.6)
– Copeland, North West (2.9)
– East Renfrewshire, Scotland (3.0)
– West Dunbartonshire, Scotland (3.1)
– Stirling, Scotland (3.1)
– Pendle, North West (3.2)
– Blaenau Gwent, Wales (3.3)
– North Lanarkshire, Scotland (3.3)
– Northumberland, North East (3.3)
– Mid and East Antrim, Northern Ireland (3.4)

Deposits up and down

The last ten years have also seen an up and down pattern in first-time buyer house deposits – the percentage of the house price buyers have to pay when taking out a mortgage.

The average deposit has dropped from 20 percent of house purchase price in 2013 to 17 percent in 2016. However, this is still significantly higher than in 2007 when it was 10 percent.

The average deposit first-time buyers have to put down is smallest in Northern Ireland (£16,607), while those in London have to put down the biggest deposit (£95,693).

In remarks accompanying the report, Chris Gowland, Mortgages Director at Halifax, notes:

“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.”