Average first-time buyer deposit rises 7% in a year

First-time buyers faced having to raise around £3,000 more for a deposit in 2019 than a year earlier, according to analysis.

The average amount put down by a first-time buyer in 2019 was £46,187 – 7%, or £3,032, higher compared with the average £43,155 deposit the year before, Halifax found.

Across the UK, typical first-time buyer deposit sizes range from an eye-watering £109,885 in London to a substantial £24,091 in the North East of England.

The average price paid by a first-time buyer in the UK last year was £231,455, up by £18,252 (9%) from a year earlier (£213,203).

Burnley, in the North West of England, was identified as the most affordable area for local first-time buyers – calculated by comparing average earnings with average house prices – with a ratio of 3.1.

The least affordable was Hackney in London, with an average house price-to-earnings ratio of 12.1.

The average price paid for a home by a first-time buyer in London has increased by £27,764 or 7% in the past year alone.

The price of an average first-time buyer property in the capital has more than doubled over the past decade, from £222,107 to £453,385.

Despite increasing costs, the overall number of first-time buyers has remained stable, up around 1% from 353,130 in 2018 to 356,767 in 2019, Halifax said.

This means that such buyers account for more than half (51%) of all house purchase loans.

Northern Ireland saw the biggest percentage increase in the number of first-time buyers, up by 6% year on year, from 10,430 to 11,013.

Russell Galley, managing director, Halifax, said: “Whilst price growth in the overall housing market has been modest in recent years, the level of inflation facing first-time buyers is greater, which compounds the challenge in raising bigger deposits.

“However, given their importance to the market as a whole, it’s reassuring that the overall number of new buyers getting on the ladder remains stable.

“This is in part explained by initiatives designed specifically to support this key group, including Help to Buy schemes and family support mortgages, and they also benefit from the continued period of record low interest rates.

“However, it’s clear that more needs to be done to address more fundamental long-term issues, not least the shortage of new, affordable homes being built.”

Halifax used figures from its own database as well as data from UK Finance and the Office for National Statistics (ONS) to make the findings.

Here are figures from Halifax showing average first-time buyer house prices, deposits and deposits as a percentage of the house purchase price in 2019: 

– North West, £136,104, £24,091, 18%
– Yorkshire and the Humber, £156,232, £27,598, 18%
– North West, £163,459, £29,472, 18%
– East Midlands, £181,876, £32,917, 18%
– West Midlands, £185,091, £34,178, 18%
– East Anglia, £220,719, £43,188, 20%
– Wales, £153,267, £25,704, 17%
– South West, £221,357, £42,584, 19%
– South East, £295,348, £54,425, 18%
– London, £453,385, £109,885, 24%
– Northern Ireland, £136,850, £25,317, 19%
– Scotland, £152,728, £29,950, 20%

Here are the 10 most affordable local authority areas for first-time buyers in 2019, according to Halifax, with the average house price-to-earnings ratio:

1. Burnley, North West, 3.1
=2. North Ayrshire, Scotland, 3.3
=2. East Ayrshire, Scotland, 3.3
=2. Inverclyde, Scotland, 3.3
5. Merthyr Tydfil, Wales, 3.4
=6. Renfrewshire, Scotland, 3.5
=6. Stirling, Scotland, 3.5
=6. South Ayrshire, Scotland, 3.5
=6. Blaenau Gwent, Wales, 3.5
10. Pendle, North West, 3.6

Here are the 10 least affordable local authority areas for first-time buyers in 2019, according to Halifax, with the average house price-to-earnings ratio:

1. Hackney, London, 12.1
2. Brent, London, 11.6
3. Lambeth, London, 11.1
4. Hillingdon, London, 11.0
=5. Newham, London, 10.7
=5. Hounslow, London, 10.7
=7. Waltham Forest, London, 10.3
=7. Oxford, South East, 10.3
9. Harrow, London, 10.2
10. Southwark, London, 10.1

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