A report released by the UK’s biggest lender, Halifax, reveals that the age of first time buyers rose by three years over the past decade. The average age for a first time buyer is now more than 30 in every region of the UK.
This is despite the fact that purchases by first time buyers were at their highest for 19 years in 2021, according to Yorkshire Building Society. The estimated 408,300 first time buyer transactions in the year were a 35% increase on 2020.
Continuing high prices are likely to be a major factor in the rising age of first time buyers, meaning they need to wait longer before they can afford to step onto the housing ladder.
Halifax’s mortgage director, Esther Dijkstra said: “Lifestyles have changed, over time more people have chosen to go on to higher education, go travelling, or move around for work, which are all factors in the increase in first-time buyer age,” she said.
“However, undoubtedly, the biggest drivers are the cost of homes and the need to save a significant deposit to get on the housing ladder. In 2021, the increase in average house price to £264,140, combined with difficulties in raising a deposit, meant that the gap between purchase price and deposit widened in every region in the UK.”
First time buyers in 2021
The average first time buyer in 2021 had a deposit of £53,935 towards their home, which cost an average of £264,140. First time buyers make up around half of all mortgages.
House price increases have outstripped growth in income, with the average price to earnings ratio for first-time buyers standing at 6.9 times.
The limit for affordability is considered to be a price of 4 times salary. Looking at average incomes and average first time buyer prices in UK local authority areas, only 15 areas had prices of less than 4 times average income.
Least affordable was the London Borough of Brent where an average home cost 12.3 times average earnings, followed by Camden at 12.2 times and Haringey at 11.4 times. Most affordable was Clackmannanshire in Scotland at 3 times average earnings, followed by West Dunbartonshire and East Ayrshire, both at 3.2 times.
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