Parents to the rescue

‘Bank of Mum and Dad’ lifts first-time buyer numbers to 12-year high

THE number of first-time buyers in Britain has hit a 12-year high, despite people needing to save an average of £33,000 for a deposit.

While the number of people taking their first step on the property ladder has climbed consistently for the past five years, the figure hit a fresh high in the first half of this year at 175,500. This is the third consecutive year that firsttime buyer numbers have topped 150,000 in Britain, more than double the record low of 72,700 in the first half of 2009 following the financial crisis. However, the figure is some way off the 190,900 record of 2006.

First-time buyers now make up 51pc of all mortgage applications, according to data from Halifax, the highest level in more than a decade, despite house prices rising 21pc during this period to an average £208,741 today. The lender found that average deposits have also rocketed, from £19,364 in 2008 to £33,127 in 2018 – a 71pc increase.

In London, the first-time buyer deposit is £114,952, or 27pc of the average purchase price. This is a three-fold increase from £38,335 in 2008.

Contributions from the “Bank of Mum and Dad” have played a big part in helping prospective buyers get a deposit together, with separate figures from the Office for National Statistics showing more than a third of new buyers received financial help from parents either as a gift of money or a loan.

Those in London have faced the biggest barrier to buying their own home, with the average first-time buyer property price increasing 48pc over the last 10 years to £419,608. By comparison, buyers in the South East must pay 37pc more than in 2008, buyers in East Anglia need to shell out 30pc more for a home compared to a decade ago, while property in the North is 8pc more expensive, and in Wales 9pc dearer.

It came as Nationwide, the UK’S largest building society, warned that house prices would stay flat for the rest of the year. Pre-tax profits at the mutual fell 13pc to £281m in the three months to June amid a “subdued” housing market, fierce competition and squeezed UK households.

“We are observing consumers adapting their behaviours in response to the pressure on disposable income,” said Joe Garner, chief executive. “The housing market looks set to remain relatively subdued with house prices broadly flat in 2018. Against this background, we also expect intense competition to persist in our core markets.”

The profit drop was also affected by a one-off gain of £26m during the same quarter last year, when it received a boost from the sale of payments firm Vocalink.

Mr Garner’s downbeat outlook comes despite gross mortgage lending at the business rising 3.7pc during the quarter, and a month after house prices appeared to be gaining momentum.

“Our outlook is unchanged from the full year, and we expect the economy to grow at a modest pace over the next 12 months,” Mr Garner added.

The slowdown in the UK’S property market has been partly blamed on the Brexit vote. According to figures from Nationwide in April, house prices were growing by about 5pc a year around the time of the EU referendum, but in 2018 growth stalled to around 1pc.