The number of first time buyers rose by an estimated 10% in the first six months of 2016 compared with the same period in 2015, according to the latest Halifax First Time Buyer Review.
There were an estimated 154,200 first-time buyers in the first half of 2016 compared with 140,500 in the same period last year, an increase of 10%. It was also more than double the market low in the first half of 2009 (72,700). For the same six-month period since 2012, the number entering the housing market has exceeded 100,000. Nonetheless, the number of first-time buyers in the first half of 2016 was nearly a fifth lower (36,700) than at the peak of the last boom in 2006.
The number of first-time buyers has increased more rapidly than the number of homemovers over the past few years as a whole. As a result, first-time buyers have increased as a proportion of all mortgage financed house purchasers from 38% in 2011 to an estimated 47% in 2016. However, the percentage has been stable over the past three years as the numbers of first-time buyers and homemovers have risen at a similar pace since 2014.
The average first-time buyer deposit in May 2016 was £33,960, more than double that in 2007 (£16,400). There has been a 14% rise in the deposit over the past year largely reflecting the increase in house prices over that period.
The 10 least affordable Local Authority Districts (LADs) for first-time buyers are all in London. The least affordable is Brent where the average first-time buyer property price of £457,014 is 12.5 times gross average annual earnings in the area.
East Dunbartonshire in Scotland is the most affordable LAD in the UK with an average property price of £97,089 – 2.6 times local annual average gross earnings. Copeland in the North West is the next most affordable (2.9). Five of the 10 most affordable LADs for first-time buyers are in Scotland.
Chris Gowland, mortgages director at Halifax, said: “There was a further increase in the number of first time buyers in the first half of the year with the total exceeding 100,000 in the first six months of each year since 2012. This rise has been broadly in line with a general improvement in market activity and is likely to have been helped by government measures including the Help to Buy scheme.
“Although numbers remain below their previous peaks and many potential first time buyers are facing escalating house prices and deposit sizes, record low mortgage rates continue to make buying seem a more attractive option than renting.”