Latest figures from mortgage-lender Halifax suggest that the number of first time buyers in the UK is continuing to grow, but not at the same rate that it once was as houses become less affordable.

Last year around 372,000 people bought their first home in the UK – the highest number of first-time buyers in 23 years. This was 2% more than the previous year – but with a significantly lower growth rate following an 8% rise overall in 2017 and 9% in 2016. Whilst the number of first-time buyers has increased considerably since 2008, the price they can expect to pay for their first home has increased by around 38% on average – from around £153,000 to £212,450 over the last ten years.

And it’s not just the overall cost of a house that is proving prohibitive. New buyers are having to save up an average deposit of £32,850 – or £110,650 in London. They then have to borrow almost 4 times their income in order to own their own property.

Government help

One of the main reasons that first-time buyers are still able to buy, despite burgeoning house prices, are the proliferation of government schemes designed to help them to get their foot on the first rung of the housing ladder. 

As discussed in previous blog posts, these involve a raft of measures such as the Help to Buy ISA, the Help to Buy equity loan scheme and stamp duty exemptions. Although these measures have proven very popular and successful in helping first-timers to buy, the continuing level of house price inflation means that they are becoming less affordable and although the number of first-time buyers is still rising, it isn’t increasing at the same rate and is showing signs that it may be slowing down, as the level of affordability becomes stretched.

Worse in the South

In Greater London, first-time buyers could expect to spend an average of £426,850 on a starter home last year, whilst elsewhere in the South East, homes averaged around £279,350 with deposits of £52,150. The most expensive area outside of London was Oxford, with an average house price to earnings ratio of 10.9.

Meanwhile, in the South West and East Anglia, first time buyers began to spend an average of more than £200,000 for the first time with homes in these areas costing around £210,000.

Not all bad news

But it’s not all bad news, there are still some places in the UK that are affordable for first-time buyers and as high-speed internet becomes rolled out to rural areas, remote working has become more commonplace, meaning that it is no longer necessary to live in or close to London, in order to have a good job. Halifax identified several areas in the UK where homes are affordable, with reasonable deposits and prices that are more in line with average local earnings. These include Copeland in Cumbria, Pendle in Lancashire, East Ayrshire, South Ayrshire and Inverclyde.

If you don’t fancy moving up north, but you can’t afford London then why not consider moving to Dorset, where the average price of a flat is around £236,650 – almost half the price of a first home in London. Planning your first move? Give us a call. We can pack, move and store your things and if you haven’t got a lot, we’ve got a small man and van service for lighter loads, available for hire by the hour. Find out more on our website: