144,500 buy first home so far in 2014

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First-time buyers

The number of first-time buyers in the first six months of 2014 reached their highest level since 2007, according to the bi-annual Halifax First-Time Buyer Review.

There were an estimated 144,5001 first- time buyers in the first six months of 2014, an increase of25% on the same period last year – and also the highest total for the same six months period since 2007 (181,500).

For the third successive year the number of first-time buyers, in the first half of the year, has been over 100,000, representing the strongest performance, for this period, since the start of the financial crisis.

First-time buyer numbers also rose by more than the total number of homemovers (20% over the same period), increasing their share of the home purchase market from 44% in the first half of 2013 to 46% in the same period this year. This was the highest proportion since 2000.

Mortgage affordability has also improved significantly in recent years. The proportion of disposable earnings devoted to mortgage payments by first-time buyers stood at 31% in the first half of 2014; substantially below of the peak level of 47% in H1 2007 and below the long-term average of 34%.

Craig McKinlay, mortgages director at Halifax, said: "First-time buyers are an important segment on the housing market, accounting for 46% of home purchases in the first six months of the year – up from 44% during the same period in 2013 and 40% in 2012.

"The resurgence in the number of first-time buyers getting on to the housing ladder has been buoyed by improving economic conditions, rising employment levels as well as government schemes such as Help to Buy, which have helped more first-time buyers on to the housing ladder."

First-time buyers purchases

Almost two-thirds (60%) of all first-time buyer purchases in the first half of 2014 were above the £125,000 stamp duty threshold, this is up from 51% a year earlier. Nationally almost half (48%) of home purchases by first-time buyers were between £125,000 and £250,000, up from 44% from a year earlier.

However, there were significant regional variations in the prices paid by first-time buyers, with those in London (1%), the South East (10 %) and South West (23%) not paying any stamp duty where the purchase price is below the £125,000 threshold.

In contrast, nearly three-quarters (72%) of first-time buyers in the North bought a home below the lowest threshold, and therefore paid no stamp duty.

Affordability

Copeland in the north west is the most affordable local authority district (LADs) in the UK with an average property price of £107,232; 2.72 times local average gross annual earnings. Seven of the 10 most affordable LADs for first-time buyers are in Scotland. They include:
  • West Dunbartonshire (2.72)
  • Renfrewshire (2.77)
  • South Ayrshire (2.92)

With their elevated prices, unsurprisingly all ten least affordable LADs are in the capital. The least affordable is Hammersmith and Fulham where the average first-time buyers property price of £640,458 is 12.3 times gross average earnings in the area.

Deposits

Nationally, the average first-time buyers deposit in 2014 Quarter two was £31,129, an increase of 9% compared to the same period a year earlier (£28,463). First-time buyers in Greater London put down the largest average deposit of £76,435; over four and a half time more than in the North West (£16,532) who put down the lowest.

The average deposit, as a proportion of the purchase price, has almost doubled from 10% in 2007 to 19% in Q2 2014.

Prices

The average price paid by first-time buyers is highest in Greater London (£306,354); over £100,000 higher than the next most expensive region, the South East (£203,826). With an average price of £110,410 the North is least expensive region to get on the housing ladder.

Age

The average age of a first-time buyer is 30 years old; up from 28 in 2009. Regionally, the average age of a first-time buyer is highest in London, at 32 years old. The average age is lowest in the north and Wales (28).