Number of first-time buyers falls by 22pc

THE number of first-time buyers fell by 22 per cent between January and August this year, compared to the same period in 2022, according to the latest Halifax First-Time Buyer Review.

However, first-time buyers still accounted for over half 53 per cent of all home loans agreed in the first eight months of this year, a similar proportion as during the same period in 2022.

Kim Kinnaird, Director of Halifax Mortgages, says that the growth in house prices over the past decade means raising a suitable deposit remains a significant hurdle. She adds: “There is then finding the right property in a housing market with limited supply, coupled with the sharp rise in interest rates more recently, meaning there is lots to consider for any first-time buyer.

“The average age of those buying their first property is now 32, rising by two years over the past decade, most likely reflecting that increasing costs are making the road to home ownership longer. The expected further fall in house prices this year, alongside stronger income growth, may somewhat offset higher interest rates.”

The Halifax add that some areas continue to be great options for first-time buyers and cite Scotland as a good example, as average house prices there are almost £100,000 less than the UK average. Many parts of Yorkshire can also be classed as affordable for first timers. While the number of first-time buyers has fallen between January and August of this year compared to the same time last year, a record number bought homes over the previous two years thanks to low interest rates and the Stamp Duty holiday.

Halifax say that strong income growth in recent months means the house price to income ratio for first-time buyers has fallen from 5.8 in June last year, to 5.1, meaning house prices are at their most affordable since June 2020.