First-time buyers at nine-year high

First-time buyers at nine-year high
The number of buyers getting on the housing ladder exceeded 300,000 for the third year in succession – a welcome boost for current homeowners, house builders and the government.

The number of first-time buyers reached 335,750 in 2016 – the highest level since the start of the financial crisis in 2007, according to the latest Halifax First-Time Buyer Review.

First-time buyers numbers have totalled over 300,000 for the third successive year. However, first-time buyer numbers still remain 17% below the immediate pre-crisis peak of 402,800 in 2006.

In 2006 just over a third (36%) of all house purchases financed by a mortgage were made by first-time buyers. In 2016, this proportion is estimated to have reached almost half (49%), the highest level since 1996.

With rising house prices, the average first-time buyer deposit has more than doubled over the past decade from £15,168 in 2006 to £32,321 in 2016 – an increase of 113%.

In London the average deposit by new entrants to the housing market has grown four-fold in the past decade, from £26,701 to £100,445 – an increase of 276%.

Other regions to see a sharp rise in the average deposit include the South East at £47,472 (an increase of 173%), the South West – up to £34,306 (or 130%) and the East – up to £31,864 (+122%).


By comparison, first-time buyers in Northern Ireland have fared the best with average deposits falling by a fifth (20%) from £20,834 in 2006 to £16,695 – the lowest in the UK.

In 2016 the average house price paid by first-time buyers was £205,170 – the highest on record. Since falling to £135,254 at the height of the housing downturn in 2009, the average price paid by first-time buyers has grown by 52%. In the past year, this average has grown from £191,929, an increase of 7%.

As house prices for a typical first-time buyer home have risen, there has been a growing trend towards mortgage terms longer than the more traditional 25-year term. In 2006, 36% had a mortgage term that was over 25 years, rising to 60% in 2016.

In 2016, 28% of all first-time buyers with a mortgage opted for a 30 to 35-year term, a share that has grown sharply from 11% in 2006.

Martin Ellis, Housing Economist at Halifax, said: “First-time buyers play a crucial role in the housing market, and each transaction has an impact further up the chain, as well as helping to drive levels of housebuilding.

"The number of buyers getting on the housing ladder exceeded 300,000 for the third year in succession – a welcome boost for current homeowners, house builders and the government. Continuing low mortgage rates, high levels of employment have supported the market and Government schemes such as Help to Buy have improved affordability, enabling more first-time buyers to buy their own property.

“Across the regions there is a contrasting picture. In London – which has one of the youngest populations in the UK – the average house price for a typical first-time buyer is now more than an eye-watering £400,000 with an average deposit of over £100,000 – more than twice that in the South East, the next most expensive region.”

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