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UK first-time buyer numbers rise at record rate

·3-min read
Elegant apartment building in Notting Hill, London.
Since 2009 first-time buyer numbers have more than doubled. Photo: Getty Images

First-time buyer (FTB) numbers rose at a record rate despite low affordability, according to new analysis from Halifax.

The figure was up 35% year-on-year to 409,370. In 2020 the figure had been down 13% when compared with the year prior.

Halfiax said the average first-time buyer age in 2021 was 32 and put down a £53,935 ($73,508) deposit on a property costing £264,140. The average age was up from 29 in 2011 and is now over 30 in every UK region.

“There were a number of factors influencing home buying decisions in 2021. While working from home and the ‘race for space’ was key for many, particularly movers, it’s clear that the stamp duty holiday increased the availability of first-rung homes as others moved up the ladder," said Esther Dijkstra, mortgage director at Halifax.

"Lifestyles have changed – over time more people have chosen to go on to higher education, go travelling, or move around for work, which are all factors in the increase in first-time buyer age, she said, adding: "the biggest drivers are the cost of homes and the need to save a significant deposit to get on the housing ladder."

Since 2009 first-time buyer numbers have more than doubled, with an increase of over 100,000 in the last 12 months. The biggest increase was in London, where numbers rose 49%. The smallest, Scotland, still saw an increase by a quarter. The number of first-time buyers has more than doubled over the last 10 years in every region except London (up 82%).

Read more: UK house prices climb 10% in November

Despite this surge, first-time home purchasers remained at around half of all home loans.

And as more buyers entered the market the average first-time buyer deposit fell 6% for the UK, with only Wales and Scotland noting an increase regionally.

Watch: How much money do I need to buy a house?

This fall in the UK average was set against a rise in the average purchase price of first homes, which meant that, overall, the gap between purchase price and deposit widened in every region.

In 2021, the increase in average house price to £264,140, combined with difficulties in raising a deposit, meant that the gap between purchase price and deposit widened in every region in the UK.

The growth of house prices has outstripped that of incomes and the average price to earnings ratio for UK first-time buyers now stands at 6.9 times. Affordability in all but three local authorities has fallen since 2011.

The price of an average FTB home is now less than four times the average income, considered the limit for affordability, in just 15 local authorities around the UK.

The UK government recently reported that the average UK house price saw double-digit growth in the year to November, gaining £25,000 when compared to the previous year.

Property prices in Britain rose 10% to £271,000 in the period, up from 9.8% in October thanks to cheap mortgage rates, the return on high loan-to-value mortgages, and a change in working habits.

Watch: Am I wasting my money by renting?

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