The UK housing market has witnessed a significant decline in the number of first-time buyers, according to the latest Halifax First-Time Buyer Review.
Between January and August this year, the number of first-time buyers fell by 22% compared to the same period in 2022.
Despite this decline, first-time buyers still accounted for over half (53%) of all home loans, suggesting a slow but resilient market for those entering homeownership.
“Getting the keys to your first home is a significant milestone in anyone’s life,” said Kim Kinnaird, director at Halifax Mortgages.
Kinnaird noted that while lenders are poised to help newcomers enter the market, the rising cost of homes and deposits remain formidable challenges.
The average price for a first home currently stands at £288,030, a 2% drop over the past year. However, first-time buyer deposits have also fallen, with an average deposit now at £54,116. “There is lots to consider for any first-time buyer,” added Kinnaird, pointing out that areas like Scotland continue to offer relatively affordable options, with first homes costing almost £100,000 less than the UK average.
Several challenges have impacted first-time buyers in recent months, including rising mortgage rates and inflation acting as further barriers to saving for a deposit.
While Government relief schemes like Stamp Duty exemptions had previously encouraged first-time buyers, the end of such support has been a factor in the decline.
Yet, long-term trends indicate that the number of people buying their first home is 17% higher than it was a decade ago, bolstered by strong income growth.
The South East of the UK, which has the second most expensive average property prices, witnessed the largest decline in first-time buyers with a 25% decrease.
In contrast, Scotland emerged as the most affordable region for first-time buyers, supported by data that suggests nine of the top 10 most affordable places for first-time buyers are in Scotland.
The average age of first-time buyers has also seen a shift, increasing to 32, up from 30 a decade ago.
Kinnaird observed that “increasing costs are making the road to home ownership longer.” The latest statistics reaffirm this, as strong income growth has only partially offset the rising costs, leaving affordability a relative term in the face of fluctuating market conditions.
