"New buyers made up over half of all home loans. However, to get a foot on the ladder most people are now buying for the first time in joint names."
- Kim Kinnaird, director at Halifax Mortgages
First-time buyers are joining up to step onto the housing ladder, as almost two thirds (63%) of mortgage completions are now in joint names, according to the latest analysis from Halifax.
First-time buyers put an average deposit of £53,414 down last year, £21,000 more than a ten years ago (+67%). Although the average salary is higher than it was a decade ago, now £43,257 (+30%), getting together a deposit large enough to put down on a first home means raising more than a year’s average pay.
Those buying a property for the first time continued to be the majority (53%) of all home loans last year. It was also the highest proportion, since 1995, of all home purchases with a mortgage. However, the overall number of first-time buyers fell by 21% to 293,339 last year, compared to 2022.
Across the UK all regions saw a fall in the number of first-time buyers entering the market last year. The greatest drops were in East Anglia and the South East, both down 24%. Scotland was the most resilient - first-time buyers in the nation fell by 10%.
The average house price for buyers entering the housing market in 2023 was £288,136, 5% lower than the previous year. Despite this, house prices for first-time buyers remain over £132,000 more expensive, on average, than ten years ago (+86%).
Flats have increased in popularity as a starter home compared to a decade ago, increasing by 6pp, signaling that flats may be a more accessible property type for new buyers and a lower relative price point. Whereas the number of first-time buyers choosing a terraced home has dropped by 7pp compared to ten years ago.
When looking over the last decade, all regions excluding London saw an increase in buyers purchasing a first property. Northern Ireland was top - 45% - compared to 2013.
Kim Kinnaird, director at Halifax Mortgages, said: “Following a record year in 2021, unsurprisingly in view of the wider economic environment, the number of first-time buyers joining the property market fell again in 2023 to around 293,000. Despite this drop, new buyers made up over half of all home loans. However, to get a foot on the ladder most people are now buying for the first time in joint names.
“There are a number of schemes available to support first-time buyers, like the mortgage guarantee scheme, which allows us to offer up to 95% mortgages to first-time buyers and has been extended until June 2025. Alternatively, the First Homes scheme offers discounts on new-build homes to first-time buyers, while shared ownership options allow new buyers to purchase some of the property and rent the rest.
“The overall fall in house prices we saw in 2023 will go some way to helping people get on the ladder for the first time – but these buyers are still dependent on a steady supply of properties in their price range, while they are faced with the continued pressure of saving for a deposit, when rent and living costs are high.”