Welcome!

News Feed Item

Largest Annual Increase in First-Time Buyers Since 2001

Number of first-time buyers up by an estimated 22% in 2013

LONDON, ENGLAND -- (Marketwired) -- 01/08/14 -- The number of first-time buyers (FTBs) continued to increase in 2013, according to the annual Halifax First Time Buyer Review.

Last year the number of first-time buyers grew by an estimated 22%; the largest annual rise since 2001. This was the second consecutive annual increase following a 13% rise in 2012.

There were an estimated 265,000 FTBs in 2013, up from 218,000 in 2012. While this was the highest annual total since 2007, it was still nearly 30% lower than the annual average between 2003 and 2007 (370,800). FTB numbers increased their share of all house purchases made with a mortgage, now accounting for 45%, up from 40% in 2012 (see Table 1).

Mortgage affordability has improved significantly in recent years. The proportion of disposable earnings devoted to mortgage payments by a first-time buyer stood at 30%1 in 2013 Quarter 4. This is a substantial improvement since summer 2007 when this figure reached a peak of 50%. Record low mortgage rates have been a major contributing factor driving this improvement.

There has also been an increase in the proportion of areas that are affordable for FTBs since 2007. In a third (31%) all of local authority districts (LADs) in the UK the average house price paid by a first-time buyer in November 2013 was affordable for someone on average earnings - based on the ratio of the average house price to earnings being below the long-term average of 4.0. This compares to the peak of the market in 2007 when just 5% of LADs were affordable. The average price paid by FTBs in 2013 was 10% lower than it was in 2007 (see Table 2).

Close to half (45%) of all FTB purchases in 2013 were below the GBP 125,000 Stamp Duty threshold. A similar proportion (46%) of properties bought by FTBs were priced between GBP 125,000 and GBP 250,000. The overwhelming majority (98%) of FTBs in London bought homes above the GBP 125,000 threshold, followed by the South East (87%), and South West (74%) (see Table 3).

Martin Ellis, housing economist at Halifax, commented: "The number of first-time buyers is estimated to have grown by a fifth in 2013, the largest annual increase in more than a decade. Low interest rates, improvements in consumer confidence and Government schemes, such as Help to Buy, all appear to have contributed to the rise in the number of first time buyers.

"However, many potential first-time buyers continue to find raising the necessary deposit a problem. The Help to Buy mortgage guarantee scheme should enable more buyers to get on to the property ladder with smaller deposits. Continuing pressure on household finances during the next 12 months will no doubt remain a constraint."

ADDITIONAL KEY FINDINGS

Deposits


--  The average FTB deposit in 2013 stood at GBP 30,943; 11% higher than in
    2012 (GBP 28,001) and GBP 13,444 (77%) higher than in 2007 (GBP 17,499)
    (see Table 4).
    
--  FTBs in Greater London put down the largest average deposit, at GBP
    56,183. FTBs in the North East put down the smallest average deposit, at
    GBP 15,862. 

Prices


--  The average price paid by a FTB is highest in Greater London (GBP
    280,915); almost two and a half times that in the North East (GBP
    105,748) where the average price paid by a FTB is the lowest (see Table
    4). 

Age


--  The average age of a FTB is 30 years; up from 29 in 2011. The average
    age of a FTB is highest in London, at 31 years old. 
--  There has been a significant increase in the proportion of FTBs
    receiving financial help in recent years. The CML estimates 65% of FTBs
    had financial assistance in mid 2012 compared with 31% in mid-2005. 

Table 1: Number of First-Time Buyers - UK


============================================================================
             Number of First-Time                          FTBs as % of all 
                           Buyers     Annual % change  House Purchase Loans 
============================================================================
2002                      531,800                   6%                   38%
============================================================================
2003                      369,600                 -31%                   30%
============================================================================
2004                      358,100                  -3%                   29%
============================================================================
2005                      363,800                   2%                   37%
============================================================================
2006                      402,800                  11%                   36%
============================================================================
2007                      359,900                 -11%                   36%
============================================================================
2008                      192,300                 -47%                   37%
============================================================================
2009                      196,600                   2%                   38%
============================================================================
2010                      198,600                   1%                   37%
============================================================================
2011                      193,000                  -3%                   38%
============================================================================
2012                      217,900                  13%                   40%
============================================================================
2013(i)                   265,000                  22%                   45%
============================================================================
                                                                            
Source: CML                                                                 
(i)Halifax estimate                                                         

Table 2: % of affordable LADs for First-Time Buyers by Region, 2007 and 2013(i)


============================================================================
                                 2007                       2013            
                      ======================================================
                        Affordable  Unaffordable   Affordable  Unaffordable 
                      ======================================================
                                   %                          %             
============================================================================
North East                       0%          100%          75%           25%
============================================================================
Wales                            0%          100%          50%           50%
============================================================================
Yorkshire and The                                                           
 Humber                          6%           94%          76%           24%
============================================================================
North West                       9%           91%          71%           29%
============================================================================
East Midlands                    5%           95%          57%           43%
============================================================================
Scotland                        33%           67%          70%           30%
============================================================================
West Midlands                    0%          100%           9%           91%
============================================================================
South West                       0%          100%           0%          100%
============================================================================
East of England                  0%          100%           0%          100%
============================================================================
South East                       0%          100%           0%          100%
============================================================================
London                           0%          100%           0%          100%
============================================================================
United Kingdom                   5%           95%          31%           69%
============================================================================
                                                                            
Source: Halifax. Northern Ireland has been excluded from the regional       
analysis                                                                    
(i)2007 refers to 12 months to December. 2013 refers to 12 months to        
November.                                                                   

Table 3: First-Time Buyer Purchases by Stamp Duty Thresholds by Region


============================================================================
   % of FTB Purchases by Stamp Duty Threshold - January to November 2013    
============================================================================
                      less than   GBP 125k-GBP     less than   greater than 
                       GBP 125k           250k      GBP 250k       GBP 250k 
============================================================================
North                        76%            23%           99%             1%
============================================================================
Yorkshire and The                                                           
 Humber                      70%            29%           99%             1%
============================================================================
North West                   67%            31%           99%             1%
============================================================================
East Midlands                65%            33%           99%             1%
============================================================================
West Midlands                58%            40%           98%             2%
============================================================================
East Anglia                  37%            59%           96%             4%
============================================================================
Wales                        69%            30%           99%             1%
============================================================================
South West                   26%            70%           96%             4%
============================================================================
South East                   13%            75%           88%            12%
============================================================================
Greater London                2%            58%           60%            40%
============================================================================
Northern Ireland             85%            14%          100%             0%
============================================================================
Scotland                     68%            30%           98%             2%
============================================================================
United Kingdom               45%            46%           91%             9%
============================================================================
                                                                            
Source: Halifax.                                                            

Table 4: First-Time Buyers: Average Price, Loan and Deposit by Region, 2013


============================================================================
                                        Average       Average  Deposit as % 
                    Average House      Mortgage       Deposit   of purchase 
                      Price (GBPs)        (GBPs)        (GBPs)        price 
=============================================== ============================
North                     105,748        89,886        15,862            15%
============================================================================
Yorkshire and                                                               
 Humberside               112,147        95,183        16,964            15%
============================================================================
North West                115,618        98,127        17,491            15%
============================================================================
East Midlands             121,595        97,576        24,019            20%
============================================================================
West Midlands             129,278        97,213        32,065            25%
============================================================================
East Anglia               149,370       119,670        29,700            20%
============================================================================
Wales                     113,932        91,146        22,786            20%
============================================================================
South West                159,319       131,810        27,509            17%
============================================================================
South East                195,259       165,957        29,302            15%
============================================================================
Greater London            280,915       224,732        56,183            20%
============================================================================
Northern Ireland           92,778        78,861        13,917            15%
============================================================================
Scotland                  114,781        92,831        21,950            19%
============================================================================
UK                        156,701       125,758        30,943            20%
============================================================================
                                                                            
Source: Halifax 12 months to November, CML                                  

ENDS

Notes to editors:

1 Based on average loan taken out by a new first-time buyer.

THE AFFORDABILITY CALCULATION:

A local authority (LAD) is classified as affordable if the average house price for a First-Time Buyer (FTB) in the LAD is lower than someone on average earnings in the area can pay. Gross average annual earnings for the LAD are multiplied by 4.0 to calculate the amount that someone on average earnings could 'afford' to pay. For example, if average earnings in the LAD are GBP 30,000, someone on average earnings in the area could pay up to GBP 120,000. The LAD is deemed to be affordable if the average price paid by a FTB in the LAD is less than GBP 120,000 and unaffordable if it is higher.

The multiple of 4.0 is in line with the average house price to income ratio for a FTB over the period from 1991 to 2013. (Source: Halifax)

DATA SOURCES:

This research is based on data from the Halifax's own extensive housing statistics database and ONS data on average earnings.

1. House Prices

The prices used in this research are simple arithmetic ('crude') averages. These prices are not standardised and therefore can be affected by changes in the sample from period to period.

2. Average Earnings

Average earnings figures are from the ONS's "Annual Survey of Hours and Earnings" (ASHE) and refer to the means for full-time employees.

At local authority district level, figures for the relevant local authority (residence based) are used in the majority of cases. Where this has not been possible due to data unavailability, the relevant regional average has been used.

"This report is prepared from information that we believe is collated with care, however, it is only intended to highlight issues and it is not intended to be comprehensive. We reserve the right to vary our methodology and to edit or discontinue/withdraw this, or any other report. Any use of this report for an individual's own or third party commercial purposes is done entirely at the risk of the person making such use and solely the responsibility of the person or persons making such reliance. "

For the latest housing research, previous releases, and for information on the Halifax House Price Index, please follow this link: http://www.lloydsbankinggroup.com/media1/economic_insight/halifax_house_price_index_page.asp.

Housing Economics Helpline No: 08456 045404

Email: [email protected]

ISDN facilities are available for broadcast media interviews.

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
Today we can collect lots and lots of performance data. We build beautiful dashboards and even have fancy query languages to access and transform the data. Still performance data is a secret language only a couple of people understand. The more business becomes digital the more stakeholders are interested in this data including how it relates to business. Some of these people have never used a monitoring tool before. They have a question on their mind like “How is my application doing” but no id...
IoT solutions exploit operational data generated by Internet-connected smart “things” for the purpose of gaining operational insight and producing “better outcomes” (for example, create new business models, eliminate unscheduled maintenance, etc.). The explosive proliferation of IoT solutions will result in an exponential growth in the volume of IoT data, precipitating significant Information Governance issues: who owns the IoT data, what are the rights/duties of IoT solutions adopters towards t...
It is ironic, but perhaps not unexpected, that many organizations who want the benefits of using an Agile approach to deliver software use a waterfall approach to adopting Agile practices: they form plans, they set milestones, and they measure progress by how many teams they have engaged. Old habits die hard, but like most waterfall software projects, most waterfall-style Agile adoption efforts fail to produce the results desired. The problem is that to get the results they want, they have to ch...
With the introduction of IoT and Smart Living in every aspect of our lives, one question has become relevant: What are the security implications? To answer this, first we have to look and explore the security models of the technologies that IoT is founded upon. In his session at @ThingsExpo, Nevi Kaja, a Research Engineer at Ford Motor Company, discussed some of the security challenges of the IoT infrastructure and related how these aspects impact Smart Living. The material was delivered interac...
The current age of digital transformation means that IT organizations must adapt their toolset to cover all digital experiences, beyond just the end users’. Today’s businesses can no longer focus solely on the digital interactions they manage with employees or customers; they must now contend with non-traditional factors. Whether it's the power of brand to make or break a company, the need to monitor across all locations 24/7, or the ability to proactively resolve issues, companies must adapt to...
Wooed by the promise of faster innovation, lower TCO, and greater agility, businesses of every shape and size have embraced the cloud at every layer of the IT stack – from apps to file sharing to infrastructure. The typical organization currently uses more than a dozen sanctioned cloud apps and will shift more than half of all workloads to the cloud by 2018. Such cloud investments have delivered measurable benefits. But they’ve also resulted in some unintended side-effects: complexity and risk. ...
With major technology companies and startups seriously embracing Cloud strategies, now is the perfect time to attend 21st Cloud Expo October 31 - November 2, 2017, at the Santa Clara Convention Center, CA, and June 12-14, 2018, at the Javits Center in New York City, NY, and learn what is going on, contribute to the discussions, and ensure that your enterprise is on the right path to Digital Transformation.
In 2014, Amazon announced a new form of compute called Lambda. We didn't know it at the time, but this represented a fundamental shift in what we expect from cloud computing. Now, all of the major cloud computing vendors want to take part in this disruptive technology. In his session at 20th Cloud Expo, Doug Vanderweide, an instructor at Linux Academy, discussed why major players like AWS, Microsoft Azure, IBM Bluemix, and Google Cloud Platform are all trying to sidestep VMs and containers wit...
The taxi industry never saw Uber coming. Startups are a threat to incumbents like never before, and a major enabler for startups is that they are instantly “cloud ready.” If innovation moves at the pace of IT, then your company is in trouble. Why? Because your data center will not keep up with frenetic pace AWS, Microsoft and Google are rolling out new capabilities. In his session at 20th Cloud Expo, Don Browning, VP of Cloud Architecture at Turner, posited that disruption is inevitable for comp...
While DevOps most critically and famously fosters collaboration, communication, and integration through cultural change, culture is more of an output than an input. In order to actively drive cultural evolution, organizations must make substantial organizational and process changes, and adopt new technologies, to encourage a DevOps culture. Moderated by Andi Mann, panelists discussed how to balance these three pillars of DevOps, where to focus attention (and resources), where organizations might...
No hype cycles or predictions of zillions of things here. IoT is big. You get it. You know your business and have great ideas for a business transformation strategy. What comes next? Time to make it happen. In his session at @ThingsExpo, Jay Mason, Associate Partner at M&S Consulting, presented a step-by-step plan to develop your technology implementation strategy. He discussed the evaluation of communication standards and IoT messaging protocols, data analytics considerations, edge-to-cloud tec...
New competitors, disruptive technologies, and growing expectations are pushing every business to both adopt and deliver new digital services. This ‘Digital Transformation’ demands rapid delivery and continuous iteration of new competitive services via multiple channels, which in turn demands new service delivery techniques – including DevOps. In this power panel at @DevOpsSummit 20th Cloud Expo, moderated by DevOps Conference Co-Chair Andi Mann, panelists examined how DevOps helps to meet the de...
When growing capacity and power in the data center, the architectural trade-offs between server scale-up vs. scale-out continue to be debated. Both approaches are valid: scale-out adds multiple, smaller servers running in a distributed computing model, while scale-up adds fewer, more powerful servers that are capable of running larger workloads. It’s worth noting that there are additional, unique advantages that scale-up architectures offer. One big advantage is large memory and compute capacity...
In the world of DevOps there are ‘known good practices’ – aka ‘patterns’ – and ‘known bad practices’ – aka ‘anti-patterns.' Many of these patterns and anti-patterns have been developed from real world experience, especially by the early adopters of DevOps theory; but many are more feasible in theory than in practice, especially for more recent entrants to the DevOps scene. In this power panel at @DevOpsSummit at 18th Cloud Expo, moderated by DevOps Conference Chair Andi Mann, panelists discussed...
"When we talk about cloud without compromise what we're talking about is that when people think about 'I need the flexibility of the cloud' - it's the ability to create applications and run them in a cloud environment that's far more flexible,” explained Matthew Finnie, CTO of Interoute, in this SYS-CON.tv interview at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.