Property shortage hampering Britain’s first-time buyers
A shortage of properties and rising prices resulted in a marginal decline in the number of first-time buyers in Britain during 2015, according to a new report from the Halifax.
The bank said it was the first time since it started collating data in 2011 that the annual total of first-time buyers had declined. However, it added that the number of new buyers in 2015 was still 60 per cent higher than the 193,000 seen in 2011.
According to the report, the typical deposit for new entrants to the property market surpassed the £30,000 mark last year. Within that figure were wild regional variations, with deposits in the North of England averaging £17,738 (15 per cent of the average purchase price) while the figure in London hit £91,409, about a quarter of the cost of a starter home.
Halifax calculated that about 310,000 first-time buyers took out a mortgage last year, slightly down from the 311,700 people who did so in 2014.
The shortage of suitable homes – reflecting a general property shortage across all price ranges in much of the country – and the consequent rise in prices were the main factors for the decline in numbers, said the Halifax, despite the number of attractive mortgage offers on the market.
Average deposits for first-time buyers rose by 13 per cent – £3,833 in cash terms – during 2015. In 2014, the average for first-time buyers was £29,094; last year, it was £32,927. Meanwhile, the average price increased by 10 per cent to £190,180.
Again, though, there were wide differences between different parts of the UK. First-time buyers in Northern Ireland paid an average of £108,542 while, in London, the figure was £367,990.
The annual Halifax First-Time Buyer Review added that increasing numbers of new buyers opted for 35-year mortgages with 26 per cent choosing them, representing a progressive increase from the 16 per cent who chose them in 2007.
Over those eight years, the proportion of first-time mortgages with a 20– to 25–year terms fell from 48 per cent to 30 per cent.
Craig McKinlay, mortgages director at the Halifax, said, "For the second year in succession, the number of buyers getting on the first rung of the housing ladder has reached 310,000.
"Although the average price of the typical first-time buyer home has grown by 10 per cent in the past year, the number of buyers taking that first step onto the housing ladder has been supported by favourable economic conditions; namely, record low mortgage rates, rising employment and real pay growth."
Regional breakdown (average house prices, average deposits by first-time buyers, deposit percentage):
- North – £118,254, £17,738, 15%
- Yorkshire and the Humber – £129,326, £19,399, 15%
- North West – £132,948, £19,849, 15%
- East Midlands – £138,922, £21,237, 15%
- West Midlands – £147,554, £22,753, 15%
- East Anglia – £178,305, £33,599, 19%
- Wales – £124,817, £18,606, 15%
- South West – £183,408, £35,538, 19%
- South East – £242,111, £44,024, 18%
- London – £367,990, £91,409, 25%
- Northern Ireland – £108,542, £16,578, 15%
- Scotland – £133,178, £21,424, 16%
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