The latest Halifax First-Time Buyer Review has estimated that there were 139,500 first-time buyers in the first six months of 2015.
Compared with the same period in 2014 this represents an estimated 7% reduction in purchases (from 149,500) the first annual decrease on this basis since the first half of 2011. However, with the exception of 2014 it was still the highest total for the first six months of the year since 2007 and was 92% higher than the market low recorded in the first half of 2009 (72,700).
And despite the decline in purchases by first-time buyers this year as a proportion of all mortgage financed house purchasers the proportion remains steady (also down 7%). In fact, the number of first-time buyers has increased more rapidly than the number of subsequent buyers over the past few years, from 38% in 2011 to 47% in 2015.
The average first-time buyer deposit in May 2015 was £29,8942 6% higher than in May 2014 (£28,191). This rise in the deposit largely reflects the increase in house prices over the past year. The average first-time buyer deposit is now £13,494 (82%) higher than in 2007 (£16,400).
The recent changes to the stamp duty system have saved the average first-time buyer £716, reducing the tax bill for someone buying the average priced first-time buyer property of £178,370 from £1,783 to £1,067. Savings for the average first-time buyer in London are much bigger than this with a reduction in the stamp duty bill for the average first-time buyer property in the capital (of £342,313) of £3,154 from £10,269 to £7,115.
Craig McKinlay, mortgages director at Halifax, said: “There was a modest decline in the number of first-time buyers in the first half of the year following the substantial increases recorded in 2013 and 2014. This fall has been in line with the general softening in market activity.
However, there are now signs of a pick-up in mortgage activity as the economy continues to recover and mortgage interest rates remain at very low levels. These factors could boost the number of first-time buyers during the second half of the year.
The average price paid by first-time buyers increased by 8% over the past year from £165,829 to £178,370; 9% higher than in 2007.
The average price paid by first-time buyers is highest in Greater London (£342,313); more than £100,000 higher than the next most expensive region, the South East (£225,383). Northern Ireland is the least expensive region in the UK for an first-time buyer with an average price of £104,240.
The average deposit, as a proportion of the purchase price, has fallen from 20% in 2013 to 17% in 2015. It, nonetheless, remains significantly higher than in 2007 (10%).
First-time buyers in Greater London put down the largest average deposit, at £81,680. First-time buyers in Northern Ireland put down the smallest average deposit, at £16,011.
The average age of a first-time buyer is 30 years old; up from 29 in 2011. Regionally, the average age of a first-time buyer is highest in London, at 33 years old.
There has been an increase in the proportion of areas that are affordable for first-time buyers since 2007. In 22% of local authority districts (LADs) in the UK the average house price paid by a first-time buyer in the 12 months to May 2015 was affordable for someone on average earnings based on the ratio of the average house price to earnings being below the long-term average of 4.0. This compares to the peak of the market in 2007 when just 8% of LADs were affordable.
Inverclyde in Scotland is the most affordable local authority district (LADs) in the UK with an average property price of £90,376; 2.9 times local average gross annual earnings. East Ayrshire is the next most affordable (also 2.9). Eight of the 10 most affordable LADs for first-time buyers are in Scotland.
Nine of the 10 least affordable LADs are in London. The least affordable is Hammersmith and Fulham where the average first-time buyers property price of £613,347 is 11.7 times gross average annual earnings in the area.
More than six in 10 first-time buyer purchases are above the £125,000 Stamp Duty threshold.
Nationally, 45% of properties bought by first-time buyers are priced between £125,000 and £250,000 with only 16% of first-time buyer purchases above £250,000.
However, 66% of FTBs in Greater London paid more than £250,000 and all first-time buyers in the capital were liable for stamp duty.