The average first-time buyer is spending £223,751 on their first property, according to new analysis from Direct Line Home Insurance.
The average first-time buyer needs to find £43,623 more than they did in 2016, a 24% increase, to secure their first property. Over the same period, the average salary of a thirtysomething, the decade that most people buy their first property, has risen by just 10%, leaving them with a huge deficit.
A typical first-time buyer property is now worth roughly seven times a 30–39-year old’s annual salary, a rise from 2016 when it was six times.
Direct Line’s analysis suggests that first-time buyer prices are being impacted by the movements of those in their 30s across the country. The average first-time buyer property price, in the 10 local authorities that saw the greatest increase in residents aged 30-39 between 2016 and 2021, rose by 24%. In the 10 authorities with the greatest decrease in number of 30–39-year-old residents, there was a 2% decrease in first-time buyer prices.
Areas with an above-average increase in residents of those in their 30s, saw first-time buyer prices rise by 22% over the past five years, compared to just 10% in areas with a below-average increase of residents in this age group.
Looking more deeply into local first-time buyer hotspots, the areas with the fastest growing prices in Britain are Burnley in Lancashire (up 45% over the past five years), the Orkney Islands on the north coast of Scotland (44%), Rossendale, Lancashire (42%), Bury (40%) and Rutland, East Midlands (40%). These five councils averaged a house value of £119,735 in 2016 and this rose by £50,158 to £169,893 in 2021, an increase of 42%. These five areas also saw a 9% increase in residents aged 30–39-year-old over the same timeframe, compared to a national average increase of just 5%.
Changes in first-time buyer house prices across the UK, 2016-2021
| Region | Average FTB price, 2016 | Average FTB price, 2021 | Change (£) | Change (%) |
| North West | £125,443 | £169,256 | £43,812 | 35% |
| Wales | £126,901 | £170,246 | £43,345 | 34% |
| West Midlands Region | £147,764 | £192,979 | £45,215 | 31% |
| Yorkshire and The Humber | £129,152 | £168,506 | £39,354 | 30% |
| South West | £193,408 | £245,336 | £51,928 | 27% |
| Scotland | £113,520 | £139,159 | £25,639 | 23% |
| East of England | £224,061 | £268,568 | £44,507 | 20% |
| North East | £109,489 | £130,956 | £21,467 | 20% |
| South East | £245,557 | £286,716 | £41,159 | 17% |
| London | £410,266 | £440,590 | £30,323 | 7% |
| Great Britain | £180,128 | £223,751 | £43,623 | 24% |
Source: Direct Line Home Insurance, 2022
Dan Simson, head of Direct Line Home Insurance, said: “The rate at which first-time buyer prices have been increasing is frankly frightening. However, this generation of property owners are facing the challenge of dramatically increasing property prices in traditionally popular areas such as London and instead are buying in places that are less well-known.
“We may see an even more dramatic emergence of these “young towns & cities” with the increasing prevalence of remote working that enables people to be far more flexible as to where they live.
“Given the commitment people need to make to get on the property ladder, it is vital they protect their investment with insurance should the worst happen.”