Despite fewer people buying their first home, the first-time buyer market still accounts for over half of borrowers. And with house prices decreasing, many people may still have an opportunity to get onto the property ladder.

The number of first-time buyers has fallen by 22% between January and August this year, according to Halifax. The lender says first-time buyer deposits have fallen by 12% but are still high – averaging £54,116.

Halifax says that first-time buyers still account for over 53% of all home loans agreed in the first eight months of this year, similar to the same period in 2022 – which was 52%.

Average age

The average age of a first-time buyer is now 32, according to Halifax, rising by two years over the past decade. This is most likely reflecting increasing costs and higher interest rates.

‘Getting the keys to your first home is a significant milestone in anyone’s life,’ says Kim Kinnaird, Director, Halifax Mortgages. ‘We’ve lent £5.5 billion to first-time buyers in the first six months of the year, helping people make their home-owning dreams a reality.’

Kinnaird adds: ‘The expected further fall in house prices this year, along with stronger income growth, may somewhat offset higher interest rates, which will be welcome news to many. There are some areas which continue to be great options for first-time buyers – the average cost of a property in Scotland, as an example, comes in at almost £100,000 less than the UK average.’

Inflation has been a barrier for those hoping to save for a deposit, as we all have to deal with higher prices of essential items.

Fewer first-time buyers

While there were fewer first-time buyers in the first half of 2023 compared to last year, a record number got onto the ladder over the past two years as buyers made the most of low interest rates and the stamp duty holiday. Consequently, the number of first-time buyers entering the market for the first time is 17% higher than ten years ago.

In addition, strong income growth in recent months has meant that first-time buyers’ house price-to-income ratio fell from 5.8% in June last year to 5.1%. This means that house prices for those getting onto the property ladder are at their most affordable since June 2020.

Regional differences

The South East is the second most expensive region for property prices in the UK. However, it has seen the most significant decline in first-time buyers between January and August – down by 25%. London and East Anglia had the second biggest decline in first-time buyers entering the property market this year at 24%.

Scotland is the UK’s most affordable place for first-time buyers and has seen only a 14% decline in those buying their first home in the past year.

If you’re a prospective first-time buyer, we advise ensuring you save as much as possible for a deposit and have your paperwork ready – three months’ worth of payslips and bank statements if you’re employed and details of any loans. If you’re self-employed, depending on the type of self-employment, you’ll typically need two years’ worth of tax year overviews and tax calculations. You’ll need proof of ID with your current address in both instances. Ensuring your council tax bill reflects your current name and address is essential.

For more information on documents needed for your mortgage application, click here.

Finally, speak to an experienced mortgage broker who can give you bespoke advice to suit your situation.

If you’d like to chat about buying your first home, we’re here to help.

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