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First-time Buyer

First-time buyers dominate property purchase market for first time in a generation

Paula John
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Paula John

First-time buyers now account for the majority of mortgaged property purchases, overtaking the joint numbers of subsequent-time buyers and buy-to-let investors, for the first time since 1995.

According to the latest Halifax First-Time Buyer Review, first-time buyers now account for just over half of all property purchases funded by a mortgage, rather than cash transactions, up 38% on a decade ago. The average price paid for a borrower’s first home is up 39% on average, from £153,030 in 2008 to £212,473 in 2018. Over the same period the average deposit has jumped by 57% from £21,133 (14% of purchase price) to £33,252 (20%)

The research shows that the total number of individuals or couples buying property for the first time has increased by 2% in the past year, continuing a seven year upwards trend. Growth last year was considerably slower than 2017 (7.6%) and 2015 (9%), but overall the numbers are up 92% on the low of 192,300 seen in 2008.

The number of first-time buyers has gone up 2% in the last 12 months, continuing an upward trend over the last seven years. Although growth in 2018 was at a slower rate than 2017 (7.6%) and 2016 (9%), first-time buyers overall have increased by 92% from an all-time low of 192,300 in 2008.

First-time buyers now account for just over 50% of all house purchases with a mortgage, an increase from 38% a decade ago. Halifax data revealed that the average price paid for a typical first home has gone up by 39%, from £153,030 in 2008, to £212,473 in 2018, and the average deposit has increased by 57% from £21,133 to £33,252 over the same period¹.

Borrowers buying in London are putting down a staggering £110,656 on average,  while those in Wales are paying the lowest average deposit of £16,449.

Terraced houses, closely followed by semi-detached properties have continued to be the first-time buyer’s home of choice over the past decade, making up two-thirds (67%) of mortgages for first homes in 2018.

The average age of a first-time buyer in 2018 has remained at 31 – two years older than a decade ago. In London it has grown from 31 to 33 since 2008 – the oldest in the UK. The biggest increase in age was in Northern Ireland, up by three years from 28 to 31.

Russell Galley, managing director, Halifax, said: “New buyers coming on to the ladder are vital for the overall wellbeing of the UK housing market, and the continued growth in first-time buyers shows healthy movement in this important area – despite a shortage of homes and the ongoing challenge of raising a deposit.

“Last year was the first year that first-time buyers accounted for the majority of the market since 1995, which shows that the factors reducing some of the associated costs – such as continued low mortgage rates and Stamp Duty – are supporting the increasing number of people taking their first step on to the property ladder.”