First Time Buyers are Paying Record Prices for property

The number of first time buyers in the UK during the first six months of 2017 was 15% lower than the number seen during the boom of 2006. First time buyers paid an average of £207,693 but in London this figure was just over the £400,000 mark. The figures are also indicating that the number of owners getting on the property ladder in 2017 is up from 2016.

Ten years ago, 36% of properties purchased that were financed by a mortgage involved first time buyers, however, this figure has now grown to 47%. However, the number of people moving has slowed down and so, activity in the market has relied on first time buyers making their move.

During the first half of 2017, the average price of property purchased by first time buyers has increased by 4% over the past year. In contrast to this, the average price of property over the past five years has increased by 50%, which is a significant amount. This kind of growth has meant that it has performed better than the price growth for the whole of the market.

In London, first time buyers could consider themselves unlucky as prices have increased by 66% since 2012 which is the highest figure ever recorded. The figure of £410,000 is significantly higher than that of Northern Ireland which is £115,269.

In 2017 alone, the average deposit put down by first time buyers was £32,899 which is 16% of the price of the property. However, for London properties for sale, the deposit was considerably higher at £106,577 while Northern Ireland has an average deposit of £16,457.

There are four regions in the South of England that have seen the average deposit double at a minimum and this kind of increase has made things difficult for first time buyers. However, it is London where first time buyers have really been hit hard as the deposit has increased by 276% over the last ten years.

As the price of property for first time buyers has increased, the mortgage deals on offer are providing longer terms than the more common 25 years. In 2007, around 48% of first time buyers had a mortgage term of 20 to 25 years while this figure for terms of 25 to 35 years was 38%.

Things had changed in 2016 as 56% of mortgages had a term of 25-35 years with the 20 to 25 year mortgages dropping to just 26%.

In London alone, you will find the ten least affordable local authority areas for first time buyers with Brent being the least affordable as the average cost of first time buyers property is just a few pounds short of £460,000.

In Stirling in Scotland, you will find the most affordable first time buyer market as the average price of property there is £136,181 which is only 2.9 times the average wage. In England, Copeland is the most affordable area with property prices being 3.2 times the average wage.