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Number of new buyers rises 35% in a year, says Halifax

Amid runaway house prices, the number of first-time buyers has reached an all-time high.

According to Halifax’s annual study, the number has increased by 35 percent, from 303,970 in 2020 to 409,370 in 2021.

And for the first time, the typical age of a buyer in each region is 30+.

The higher levels come at a time when first-time buyers must balance saving as much as possible for a down payment as they try to get up the real estate ladder in a red-hot market.

The number of new buyers in Britain has reached an all-time high, according to Halifax

The number of new buyers in Britain has reached an all-time high, according to Halifax

NUMBER OF FIRST BUYERS FROM 2009 TO 2021
Number of new buyers Annual % change FTBs as % of all home purchase loans
2009 193.940 39%
2010 193.590 0% 37%
2011 187,990 -3% 38%
2012 211.920 13% 40%
2013 258.210 22% 44%
2014 310,280 20% 46%
2015 298,090 -4% 46%
2016 328,500 10% 48%
2017 345,920 5% 49%
2018 353.120 2% 50%
2019 351.260 -1% 51%
2020 303.970 -13% 50%
2021* 409.370 35% 48%
Sources: UK Finance and *Halifax estimate for 2021

The average price of a home in Britain rose by £24,000 to £276,091 last year.

All regions in Britain saw a marked increase in new buyers, with the biggest increase in London, where the number rose by 49 percent.

The smallest increase was in Scotland, but even in this region the numbers increased by a quarter.

The number of new buyers has more than doubled in every region except London in the last 10 years.

Since 2011, there has been an increase of 118 percent, compared to 187,990 new buyers that year.

NUMBER OF FIRST BUYERS IN DIFFERENT REGIONS
Region 2011 2020 2021* 10 years of change 1 year change
north 8,370 13,890 18,422 120% 33%
Yorkshire and the Humber 15.010 25.070 32,792 118% 31%
East Midlands 12,780 23,110 29,850 134% 29%
East Anglia 6.750 11.010 14,640 117% 33%
Greater London 31.290 38.140 56,857 82% 49%
South East 36,630 61,250 85,666 134% 40%
South West 14,670 24,250 32.017 118% 32%
West Midlands 14,740 25,570 33,798 129% 32%
North West 18,470 32.050 40,748 121% 27%
Wales 8.060 12,310 16.815 109% 37%
Scotland 16.220 28,740 35.627 120% 24%
N. Ireland 4.690 8,570 12.110 158% 41%
UK** 187,990 303.970 409.370 118% 35%
Source: Halifax

As more buyers entered the market, the average first-time buyer’s deposit for Great Britain fell by 6 percent.

Halifax explained that the decline in the average down payment was offset by an increase in the average purchase price of first homes, meaning the gap between purchase price and down payment widened in each region.

This includes the South West, where average house prices have risen 5 per cent, from £239,434 in 2020 to £252,263 in 2021. At the same time, average deposits in the region fell 3 per cent in a year from £51,178 to £49,592 in 2021.

With lower affordability, the average age at which someone buys their first home has risen.

The average age of a new buyer now stands at 32, up from 29 in 2011, and is now over 30 in every region.

Clackmannanshire has been named as one of the most affordable places for new buyers (photo; the county town of Alloa)

Clackmannanshire has been named as one of the most affordable places for new buyers (photo; the county town of Alloa)

Clackmannanshire has been named as one of the most affordable places for new buyers (photo; the county town of Alloa)

AVERAGE HOUSE PRICE AND AVERAGE DEPOSITS WITH FIRST TIME BUYERS
Region Average House Price 2020 (£s) Average house price 2021 (£s) 1 year % change in average price Average Deposit 2020 (£s) 2021 Average Deposit (£s) Deposit as % of purchase price 2021 1 year % change in deposit
London 488.771 475.819 -3% 130.281 115.759 24% -11%
Scotland 154,821 166.919 8% 35,607 37,038 22% 4%
South West 239,434 252.263 5% 51,178 49,592 20% -3%
South East 322.386 320.591 -1% 66,706 60.953 19% -9%
Northern Ireland 147,394 156,594 6% 29.546 29,199 19% -1%
Wales 165.272 180,392 9% 32.368 33.622 19% 4%
East England 297.548 303.166 2% 58,531 55,250 18% -6%
North West 175.389 189,588 8% 34.185 33,983 18% -1%
West Midlands 204,948 209.270 2% 41,928 37,159 18% -11%
East Midlands 199,503 210,203 5% 39,077 37,171 18% -5%
North-East 145.254 151.814 5% 28,643 26,769 18% -7%
Yorks & Humber 167,267 177,683 6% 33,032 31,212 18% -6%
UK 256,057 264,140 3% 57,278 53,935 20% -6%
Source: Halifax

Esther Dijkstra, of Halifax, said: “There were a number of factors that influenced home buying in 2021.

While working from home and the ‘race for space’ have been critical for many, especially movers, it’s clear that the Stamp Duty holiday increased the availability of first-class housing as others moved up the ladder.

“Lifestyles have changed. Over time, more and more people have chosen to pursue higher education, travel or work, all contributing factors to the rise in the age of a first-time buyer.

“However, the biggest drivers are undoubtedly the cost of homes and the need to make a significant down payment to get up the housing ladder.

“In 2021, the rise in the average house price to £264,140, ​​combined with difficulties in getting a down payment, meant the gap between purchase price and down payment was widening in every region in the UK.”

Merton saw affordability cut in half: This three-bedroom semi-detached house between Wimbledon and Colliers Wood is up for sale for £799.950 through Dexters estate agents

Merton saw affordability cut in half: This three-bedroom semi-detached house between Wimbledon and Colliers Wood is up for sale for £799.950 through Dexters estate agents

Merton saw affordability cut in half: This three-bedroom semi-detached house between Wimbledon and Colliers Wood is up for sale for £799.950 through Dexters estate agents

AREAS WITH THE BIGGEST CHANGES IN AFFORDABILITY
Local Authority Average price 12 months to December 2021 (£) Estimated 2021 Average Earnings (£) P/E ratio 2021 P/E ratio 2011 Affordability deterioration
Merton 513.811 51,880 9.9 4.8 108%
Reigate and Banstead 386,719 47,929 8.1 4.1 97%
South Kesteven 250,788 36.152 6.9 3.6 94%
Westminster 682.361 67,962 10 5.2 94%
Ashford 298,239 35.216 8.5 4.4 92%
Source; Halifax
Pictured: Camden in London is one of the least affordable locations for new buyers

Pictured: Camden in London is one of the least affordable locations for new buyers

Pictured: Camden in London is one of the least affordable locations for new buyers

House prices are rising faster than incomes, with the average price of real estate for first-time buyers now being 6.9 times their salary.

It follows that Halifax announced earlier this month that house prices rose by £24,500 last year, with an average value of £276,091.

The lender said affordability has fallen in all but three local authorities since 2011, namely Clackmannanshire, Moray and East Ayrhsire.

Merton saw this price-to-earnings ratio more than double, halving affordability, while Reigate and Banstead nearly doubled.

The price of an average first home is now less than four times the median income – which is considered the limit for affordability – in just 15 local authorities in Britain.

The least affordable borough for first-time buyers is London’s Brent district, where homes earn 12.3 times the median income.

The most affordable, on the other hand, is Clackmannanshire in Scotland, where it’s only three times as expensive.

The least affordable is London's Brent, where this five-bedroom semi-detached house is up for sale for £650,000 through Drivers & Norris estate agents.

The least affordable is London's Brent, where this five-bedroom semi-detached house is up for sale for £650,000 through Drivers & Norris estate agents.

The least affordable is London’s Brent, where this five-bedroom semi-detached house is up for sale for £650,000 through Drivers & Norris estate agents.

MOST AFFORDABLE AREAS FOR FIRST TIME BUYERS
Local Authority Region P/E ratio 2021
Clackmannanshire Scotland 3
West Dunbartonshire Scotland 3.2
East Ayrshire Scotland 3.2
North Ayrshire Scotland 3.3
Renfrewshire Scotland 3.5
Source; Halifax
LEAST AFFORDABLE AREAS FOR FIRST TIME BUYERS
Local Authority Region P/E ratio 2021
Brent London 12.3
Camden London 12.2
Haringey London 11.4
Waltham Forest London 10.9
Hillingdon London 10.6
Source: Halifax

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