The total number of first-time buyers has fallen to a seven-year low in 2020, according to the latest data from Halifax.
In the first six months of 2020 there were 116,843 first-time buyers, compared to 164,800 over the same period in 2019 – a fall of 29%.
The fall comes despite first-time buyers making up over half (52%) of the property market, up from 38% in 2009. The share has steadily risen since the introduction of Help to Buy in 2013, which has helped over 270,000 buyers take their first step on to the housing ladder.
Tom Martin, director of mortgages at Halifax said, “Whilst the number of first-time buyers suffered a sharp fall during lockdown, numbers are beginning to increase as we approach the autumn, with purchases that were paused beginning to move again, and buyers making the most of the Government’s stamp duty changes.”
The data also shows that average property prices for first-time buyers have increased by 69% in the past decade, rising from £142,473 in 2010 to £241,025 today.
In London, the average first-time buyer property has nearly doubled in price (up 98%) to £463,536, with prices in the South East increasing by 73% to £303,838, and the East Midlands up 68% to £187,525.
When comparing this year to 2019, first-time buyer properties have seen a 7% rise, with Wales experiencing the highest rise at 9%, closely followed by the North East, and Yorkshire and the Humber, both up 8% to £140,114 and £161,933 respectively. Properties in London and the South East have seen the smallest annual increase of 3%.
Buyers are also putting down record deposits for their first home, averaging £47,059 in 2020, which is 25% higher than the average amount put down in 2010. However, deposits as a percentage of the property value continue to fall from their peak of 27% a decade ago, to 20% today.
Areas are considered ‘affordable’ when property prices are no more than four times local earnings. The most affordable area for a first-time buyer can be found in North Ayrshire, Scotland, where the average property is 3.2 times average local earnings. In fact, half of all the most affordable areas can be found in Scotland, with Barrow-in-Furness and Pendle in the North West also featuring (both 3.4 times local earnings).
Nine of the 10 least affordable areas can be found in London, with Brent, where average first-time buyer properties cost 12.3 times the average income, the UK’s least affordable area. Oxford also makes the list with properties costing 11.6 times the average local salary.
Martin added, “With first-time buyers in London paying almost double what they were a decade ago, yet many regions in Scotland remaining affordable, the challenges facing first-time buyers are clearly significantly influenced by where in the UK they are house hunting.”