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
|Number of new buyers||Annual % change||FTBs as % of all home purchase loans|
|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.
|Region||2011||2020||2021*||10 years of change||1 year change|
|Yorkshire and the Humber||15.010||25.070||32,792||118%||31%|
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)
|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|
|Yorks & Humber||167,267||177,683||6%||33,032||31,212||18%||-6%|
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
|Local Authority||Average price 12 months to December 2021 (£)||Estimated 2021 Average Earnings (£)||P/E ratio 2021||P/E ratio 2011||Affordability deterioration|
|Reigate and Banstead||386,719||47,929||8.1||4.1||97%|
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.
|Local Authority||Region||P/E ratio 2021|
|Local Authority||Region||P/E ratio 2021|