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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."



--  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. 


--  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


--  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       
(i)2007 refers to 12 months to December. 2013 refers to 12 months to        

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                                  


Notes to editors:

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


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)


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.

Halifax Press Team
Ben Marquand
01422 332833 / 07881 311199
[email protected]

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