Halifax: Almost two thirds of first-time buyers teaming up to get on property ladder

Almost two thirds of first-time buyers are teaming up in order to get on property ladder, according to research by Halifax.

Key points from analysis:

• • Joint first-time buyers now account for 63% of mortgage completions.
  • First-time buyers made up over half of all home loans.
  • Flats a popular starter home, up 6pp, terraced properties down -7pp, over the last decade.
  • First-time buyer average house price now £288,136, down -5% last year.
  • Inverclyde in Scotland most affordable place in the UK to buy a first home.

First-time buyers are joining up to step onto the housing ladder, as almost two thirds (63%) of mortgage completions are in joint names (with two or more people), according to the latest analysis from Halifax.

It’s unsurprising the majority of first-time buyer applications are joint, given the increase in deposits over the last decade. First-time buyers put an average deposit of £53,414 down last year, £21,000 more than a ten years ago (+67%). Although the average salary is higher than it was a decade ago, now £43,257 (+30%), getting together a deposit large enough to put down on a first home means raising more than a year’s average pay.

Those buying a property for the first time continued to be the majority (53%) of all home loans last year. It was also the highest proportion, since 1995, of all home purchases (with a mortgage). However, the overall number of first-time buyers fell by -21% to 293,339 last year, compared to 2022.

The average house price for buyers entering the housing market in 2023 was £288,136, -5% lower than the previous year. Despite this, house prices for first-time buyers remain over £132,000 more expensive, on average, than ten years ago (+86%).

Flats have increased in popularity as a starter home compared to a decade ago, increasing by 6 pp, signaling that flats may be a more accessible property type for new buyers and a lower relative price point. Whereas the number of first-time buyers choosing a terraced home has dropped by -7pp compared to ten years ago.

The average first-time buyer is now over 30 years old in all regions and nations, with the UK average at 32 years old.

Kim Kinnaird, Mortgages Director, Halifax said: 

“Following a record year in 2021, unsurprisingly in view of the wider economic environment, the number of first-time buyers joining the property market fell again in 2023 to around 293,000.

“Despite this drop, new buyers made up over half of all home loans.

“However, to get a foot on the ladder most people are now buying for the first time in joint names.

“There are a number of schemes available to support first-time buyers, like the mortgage guarantee scheme, which allows us to offer up to 95% mortgages to first-time buyers and has been extended until June 2025.

“Alternatively, the First Homes scheme offers discounts on new-build homes to first-time buyers, while shared ownership options allow new buyers to purchase some of the property and rent the rest.

“The overall fall in house prices we saw in 2023 will go some way to helping people get on the ladder for the first time – but these buyers are still dependent on a steady supply of properties in their price range, while they are faced with the continued pressure of saving for a deposit, when rent and living costs are high.”

Regional and national falls

Across the UK all regions saw a fall in the number of first-time buyers entering the market last year. The greatest drops were in East Anglia and the South-East, both down -24%. Scotland was the most resilient – first-time buyers in the nation fell by -10%.

When looking over the last decade, all regions excluding London saw an increase in buyers purchasing a first property. Northern Ireland was top – +45% – compared to 2013.

Property types

Terraced homes are most favoured for those starting out with their first home. This type of property made up 30% of all new mortgages for first-time buyers last year, although down -7pp compared to ten years ago.

First-time buyers have also increasingly purchased flats over the past decade, up +6pp when compared to 2013 and increased in every region and nation in the UK.

London has seen the greatest increase in first-time buyers choosing a flat to set up home, 72% in 2022 versus 59% in 2013.

First-time buyers now average 32 years old

According to Halifax’s analysis, first-time buyers are now 32 years old on average and 30 years or older across all nations and regions.

When looking more locally, Ribble Valley in the North-West has the youngest average first-time buyer at 27 years old. The oldest first-time buyers, at 37 years old on average, can be found in Slough, South-East.

Affordability for first-time buyers

Average property values for first-time buyers are now around 6.7 times the average UK salary (£43,257), so it’s unsurprising new buyers are applying for mortgages in joint names rather than by themselves.

Many of the most affordable places to buy a first home are in Scotland. Inverclyde in West-Central Scotland is the most affordable – properties here are around 2.6 times the average salary (£41,598).

At the other end of the scale, London continues to host some of the least affordable places in the country to set up a first home. First-time buyers in Islington, North London, face properties 10.6 times the average salary (£57,548).

Kindly shared by Halifax