After a decade of significantly increasing down payments and house prices, almost two-thirds of first-time buyers are now teaming up with a partner, sibling or friend to get their foot on the property ladder.
This is a marked change from 2016, when solo first-time buyers were the majority, accounting for 52% of buyers, according to the Halifax study.
Since then, mortgage rates have soared from historic lows following Prime Minister Kwasi Kwarteng’s mini-budget in 2022 and rising inflation.
The most affordable area for first-time buyers
Furthermore, housing prices remain high. In London, average first-time buyer deposits and house prices both fell slightly in 2023 (to £108,850 and £492,200 respectively), but were still 80 per cent and 85 per cent higher than ten years ago. .
In fact, the research found that eight of the top 10 most affordable local authorities for first-time buyers were in London, with Islington topping the list with a house price return of 10.6. Brent and Hello (both 10.4).
Hounslow, Barnet and Newham all have multiples of 10.0x, while Hammersmith & Fulham and Waltham Forest feature on the most affordable list with multiples of 9.6x.
Unsurprisingly, apartments, which tend to be the cheapest property type, accounted for 73% of homes sold to first-time buyers in London in 2023, up from 59% in 2013.
By comparison, the number of terraced houses sold to first-time buyers fell from 29% in 2013 to 18% a decade later, with semi-detached homes accounting for just 8% of first-time purchases.
New buyers account for more than half of all mortgages
Although the number of first-time buyers has fallen significantly to 293,340 nationwide in 2023, they account for more than half of all buyers taking out a mortgage, seeking to escape a toxic and expensive rental market. It’s a testament to both their determination and the fact that they’ve never had a mortgage before. Low interest rates over the past 10 years.
Halifax Mortgage Director Kim Kinnaird said: “Following a record 2021, the number of first-time buyers entering the property market will rise again in 2023, which is understandable given the broader economic environment. The number of people decreased to approximately 293,000.”
“Despite this decline, new buyers accounted for more than half of all mortgages. However, to get their foot onto the ladder, most people are now buying in joint names for the first time.”
“The overall decline in house prices seen in 2023 will go some way to helping people get on the ladder for the first time. However, these buyers will still be dependent on a steady supply of properties in their price range. While dependent, they face challenges such as: Continued pressure to save for a down payment at a time when rent and living costs are high. ”
Tom Bill, head of UK housing research at Knight Frank, said: “First-time buyers have been hit particularly hard by rising mortgage rates.
“The sub-4% deals that we increasingly hear about are typically for companies with capital levels of 40% or higher.
“Based on the belief that housing is a key political battleground and homeowners are likely to vote Conservative, the Government will provide further financial support for first-time buyers ahead of this year’s election. likely to provide it.”