Thursday, July 7, 2022

Number of first-time house buyers in the UK reaches record high in over two decades

house buyers in the UK

The number of first-time buyers has reached a record high in over 20 years, finds report

First-time buyers in the UK have made up the majority of the property market for the first time in over two decades, according to a recent report.

The Halifax First-Time Buyer Review found that in 2018, 372,000 FTBs bought houses for the first time in 2018 which translates to 50% of all house purchases with a mortgage. The last time FTBs were able to monopolise the market, was twenty-three years ago in 1995.

It is the seventh consecutive year that the number of first-time buyers had increased. However, the 2% rise in the number of FTBs purchasing homes is a slowdown compared with previous figures.

Schemes such as the Help to Buy have also contributed to the rise in the number of FTBs as the number of first-time buyers have increased by 92% since the credit crunch of 2008 that caused the property crisis.

The statistics reveal that the average property price paid for a first-time home has increased by 39%, from £153,030 in 2008 to 212,473 in 2018. In contrast, the average house price has only increased by 30% in the last decade, potentially highlighting that schemes, like Help to Buy, have enabled FTBs to offer more for the homes they are buying and provided them the opportunity to enter the property market when they otherwise would have been unable to do.

As property prices have increased by an average of 30% over the last decade, FTBs have been forced to save more which equates to a reduced percentage of the property in the current market. The £21,366 average deposit in 2008 represented 14% of the average home’s value. However, in the current market, the average deposit of £32,841 is only 15% of a property’s value. In 2008, the same deposit would equate to 22% of the property’s value.

Managing Director, Halifax, Russell Galley 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.

He added that 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.


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