Halifax records lowest number of first time buyers since 1980

22 December 2007 / by None
Britain's housing slump is showing no sign of improvement after Halifax reported the lowest number of first time buyers since 1980.

In the 5th annual Halifax First Time Buyer Review, which tracks housing affordability in 483 post towns, figures revealed that an estimated 300,000 first-time-buyers entered the market in 2007 compared to 532,000 in 2002 and for the first time, the proportion of first-time-buyers purchasing a flat is the same as those buying a terraced property.

Traditionally, terraced homes were the least expensive property type but in 71 per cent of towns across the UK, first-time-buyers are unable to afford terraced houses, compared to only 11 per cent of towns where terraced homes were too expensive in 2002.

Commenting on the findings, Martin Ellis, Chief Economist at Halifax, said: "Rising property values have priced many potential first-time-buyers out of the housing market. When they do enter the market first-time-buyers are now more likely to be in their thirties rather than their twenties and buy a flat rather than a terraced house. First-time-buyers are also buying proportionately more in cities than towns as they opt for convenience over size.

"Despite the increase in property prices in the past few years, the financial position of the majority of first-time-buyers is sound and they, on average, put down a 20 percent deposit, which is equivalent to more than a year's earnings."

But it isn't just the type of housing that is becoming less affordable. Now the average FTB deposit has risen by 88 percent since 2002 to £34,381 which is equivalent to 20 per cent of the purchase price –20 per cent more than the average worker's full-time earnings.

Unsurprisingly, the research revealed that Henley on Thames in the South East is the UK's least affordable town for first-time-buyers where the average property price is 13.1 times the average income. However, the cheapest place to buy in the UK is now Bootle in Merseyside, followed by Gosport in Hampshire, then Lerwick in Scotland.

Mr Ellis continues: "There is no quick fix to the first-time-buyer problem. A more subdued housing market over the next few years is a positive step for potential new entrants. Lower than average earnings house price growth together with more government initiatives may, in time, address the issue."

Read our guide for first time buyers or learn more about how to get a first time buyer mortgage

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