Or so new research from UK lender The Halifax would have us believe! The latest First Time Buyer Review The Halifax has revealed that the proportion of UK towns and cities now affordable for first time buyers is currently at its highest level for 10 years. However, there is a sting in the tail; the average first time buyer deposit now stands at £27, 857, which is 59% more than a decade ago.
According to the First Time Buyer Review, the average house price paid by a first time buyer in June 2012 was affordable for someone on average earnings in 54% of all local authority districts (LADs) – the highest proportion since 2002. Last year’s figure was 40% and this year’s is apparently eight times above the 2007 figure, when the housing market was at its peak and a mere 7% of LADs were affordable for first time buyers.
The number of first time buyers also increased over the past 12 months. However, it should be noted that the rise was from a historically low level and is due to static or lower house prices. There were approximately 114,000 FTBs in the first half of 2012, compared with 85,600 in the first half of 2011. A decade ago, the number stood at 244,700. The end of the stamp duty holiday at the back end of March is thought to have increased the number of FTBs this year.
The north-south divide has continued to widen for FTBs, despite an improvement in affordability. In June 2012, only 9% of all affordable LADs were located in the south. In 2002, 15% of all LADs affordable for FTBs were in the south with 85% in the north.
The North East was identified as the most affordable region in the whole of the UK. Here, all LADs are affordable for FTBs. The North West has the second highest proportion of LADs at 97%, followed by Scotland at 93%. London has no affordable LADs for FTBs on average earnings.
FTBs in London put down an average deposit of £59,221 followed by the South East at £34,843.
Martin Ellis, housing economist at The Halifax, commented: “With first time buyers forming a vital part of the housing market, it is clearly encouraging that the number of those getting onto the property ladder for the first time may well increase this year, albeit from a historically low level. This partly reflects the substantial improvement in home affordability for first time buyers since 2007, following the fall in house prices over the period.
However, the continued uncertainty over the outlook for the UK economy and the difficulties faced by many in raising the necessary deposit remain significant hurdles for those wishing to buy their first home.”
Source: The Halifax.