First-time buyers inWales need £17,000 deposit, claims report
FIRST-TIME buyers in Wales need to put down an average deposit of around £17,000 if they want to get on the first rung of the property ladder, a report has found.
During the first half of 2017, 47% of all house purchases with a mortgage across the UK were made by first-time buyers, according to the Halifax First-Time Buyer Review.
But the average house price paid by first-time buyers in Wales in the first half of 2017 was £136,103, Halifax found.
The average first-time buyer’s deposit in Wales in that period was £17,193 – equating to 13% of the purchase price.
Steven Pyne, mortgage services development manager at Allen & Harris, in Cowbridge Road East, Cardiff, said: “Although we are seeing house prices steadily rise in Wales, they are still within reach of first-time buyers.
“However, with certain areas in Wales benefiting from economic success (particularly south Wales), we are seeing first-time buyers begin to be priced out.
“I’m increasingly seeing more clients need to look a little further afield to secure a home within their budget.”
In London, first-time buyers need to put together a deposit of £106,577 typically, or 26% of the average price of a home.
First-time buyers in Northern Ireland put down the lowest deposits in cash terms on average, at £16,457. In Scotland, first-time buyers need a deposit of £21,565 on average.
Across the UK, the number of first-time buyers reached an estimated 162,704 in the first six months of 2017, which is only 15% below a peak seen in the last boom in 2006, Halifax said.
Schemes like Help to Buy, combined with low mortgage rates, have given aspiring home owners a helping hand in recent years.
The proportion of first-time buyers has grown from 44% since the launch of Help to Buy in 2013, Halifax said.
There are also signs of first-time buyers stretching their loans out for longer, beyond the traditional 25-year term, to cover higher house prices.
In 2016, more than half (56%) of their mortgage terms were for 25 to 35 years. In 2007 just over a third (38%) of first-time-buyer mortgages were for between 25 and 35 years, Halifax said.
The least affordable area for firsttime buyers was identified as Brent, in London. A typical first-timebuyer home there costs £459,499 or around 12.5 times local average earnings. Stirling, in Scotland, was identified as the most affordable place for first-time buyers, with a home there costing around £136,181 or around 2.9 times local average earnings.
Halifax used figures from the Council of Mortgage Lenders (CML) and the Office for National Statistics (ONS) for the research.
Martin Ellis, a housing economist at Halifax, said that for the third time in four years the numbers getting on the housing ladder in the first half of the year have exceeded 150,000 – “a level of momentum not seen since before the financial crisis”.
He said: “High levels of employment, low mortgage rates and government schemes such as Help to Buy have also helped these numbers remain robust, as first-time buyers continue to form a fundamental part of the UK housing market.”