First-time buyer numbers hit ten-year high: Halifax

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The number of first-time buyers hit a ten-year high in 2016, according to Halifax research.

The lender’s latest First-Time Buyer Review says there were 335,750 first-time buyers last year, up 7.3 per cent from 312,900 in 2015.

Halifax says the 2016 figure is the highest since the start of the financial crisis in 2007, when the figure was 359,900.

However, the UK population rose by 2.78 million between 2007 and 2017 to 64.1 million.

First-time buyer numbers still remain 17 per cent below the immediate pre-crisis peak of 402,800 in 2006.

In 2006, 36 per cent of all house purchases financed by a mortgage were made by first-time buyers.

In 2016, this proportion is estimated to have reached 49 per cent, the highest level since 1996.

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 per cent.

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 per cent.

House prices rocket

In 2016 the average house price paid by first-time buyers was £205,170 – the highest on record.

Halifax housing economist Martin Ellis says: “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.”

TMA Mortgage Club director David Copland says: “Although house price inflation has continued to rise in London, it is still lagging behind the areas within the South East commuter belt.

“As a result, we could see homeowners working on the commuter belt moving back to the Capital, especially given the recent tube and train strikes.

 “Overall, however, today’s statistics highlight both the robustness of UK house prices as well as the lack of properties available in the market. Looking ahead, it remains to be seen whether the Government’s plans for a set of new garden cities and its new Starter Homes Scheme will redress this lack of supply.”

Legal & General Mortgage Club director Jeremy Duncombe says: “The first months of the New Year give the Government an excellent opportunity to set the housing agenda for 2017, and we have already seen a number of progressive steps announced that offer real, long-term solutions to tackling the housing crisis.

“However, whilst measures such as the Government’s new Starter Homes Scheme and plans for a set of new garden cities might grab the headlines, we must also ensure that housing policy addresses the needs of people across all tenures, whether they be first time buyers, older homeowners or renters.”