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First-time Buyer

First-time buyer: the average house price increases to £200k

Victoria Hartley
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Victoria Hartley

The average house price for those buying their first home is almost £200,000, up 12% in the past year.

First-time buyer numbers remain strong in 2016, rising by 10% in the first half of the year compared with the same period in 2015, according to Halifax.

The lender said there were an estimated 154,200 first-time buyers in the first six months of 2016, more than double the market low in the first half of 2009 (72,700). However, this is still nearly a fifth lower (36,700) than at the peak of the last boom in 2006.

Double deposit

The average deposit paid by those buying their first home in May 2016 was £33,960 – more than double that in 2007 (£16,400). There has been a 14% rise in the deposit over the past year, which Halifax said largely reflects the increase in house prices over that period.

However, in London, the average first-time buyer deposit is a staggering £95,693.

It noted the average house price paid by first-time buyers increased by 12% over the past year from £178,399 to £199,414.

The 10 least affordable local authority districts for first-time buyers are all in London. The least affordable is Brent where the average first-time buyer property price of £457,014 is 12.5 times the average earnings in the area.

At the other end of the scale is East Dunbartonshire in Scotland – the most affordable area in the UK with an average property price of £97,089 – 2.6 times local annual average earnings.

Chris Gowland, mortgages director at Halifax, said: “There was a further increase in the number of first-time buyers in the first half of the year with the total exceeding 100,000 in the first six months of each year since 2012. This rise has been broadly in line with a general improvement in market activity and is likely to have been helped by government measures including the Help to Buy scheme.

“Although numbers remain below their previous peaks and many potential first time buyers are facing escalating house prices and deposit sizes, record low mortgage rates continue to make buying seem a more attractive option than renting.”