The number of first-time buyers (FTB) in the property market reached an estimated 139,500 in the first six months of 2015, according to the latest Halifax First-Time Buyer Review.
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).
“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,” commented Craig McKinlay, Mortgages Director at Halifax. “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,” he added. “These factors could boost the number of first-time buyers during the second half of the year.”
Halifax also found that there has been an increase in the proportion of areas that are affordable for FTBs since 2007.
In almost a quarter (22%) all 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 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 ten most affordable LADs for first-time buyers are in Scotland.
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