Halifax: More than six in 10 first-time buyers go joint to get on housing ladder

by | Jan 25, 2023

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The number of first-time buyers fell by 11%, to 362,461, in 2022 compared to the year prior, according to new analysis from Halifax.

However, first-time buyer levels remained higher than pre-pandemic, with the number getting on the housing ladder in 2022 higher than any previous year, other than in 2006 and 2021’s record spike. In 2021, the ‘race for space’, pent up demand from the pandemic and government measures to ease Stamp Duty costs, led to a record number of first-time buyers getting the keys to their first home.

The analysis from Halifax also shows that almost two thirds (63%**) of mortgage completions are now in joint names (with two or more people).

 

Table 1: Number of first-time buyers in the UK

Year Number of first-time buyersAnnual % changeFirst-time buyers as % of all home purchase loans
2012211,92013%40%
2013258,21022%44%
2014310,28020%46%
2015298,190-4%46%
2016328,50010%48%
2017345,9105%49%
2018353,1202%50%
2019351,260-1%51%
2020303,980-13%50%
2021405,32033%48%
2022*362,461-11%52%
Sources: UK Finance and Halifax estimates* for 2022

Kim Kinnaird, Mortgages Director, Halifax said:

“Over 362,000 people got on the property ladder in 2022, with first-time buyers now accounting for over half of all home loans. Today, getting your own place for the first time will likely mean paying over £300,000 for that new home, and putting down, on average, a £62,000 deposit.  

 

“The overall level of first-time buyers remains high, with the total number securing a home in 2022 higher than in any year other than 2021 – where we saw record demand – and prior to that, the peak seen in 2006. Buyers looking to make their first step onto the property ladder may welcome the forecasted fall in house prices this year – providing the supply is there.  Nonetheless, the cost of purchasing a home is still significant and saving for a deposit can be challenging for some first-time buyers.

“The length of time needed, and cost of, raising a deposit are likely having an impact on the profile of the average first-time buyer over time. Today, those starting out on the housing ladder are 32 years old, on average – two years older than a decade ago – and almost two thirds of people are now getting their first mortgage in joint names.”

First-time buyers fall

 

The number of first-time buyers fell across all nations and regions last year, compared to the record highs seen in 2021. 

The greatest falls last year were in the South East, South West, Wales and Northern Ireland, all dropping by 12%, an expected decline considering the very high demand seen in these areas in 2021. 

East Midlands saw the smallest fall, relative to the rest of the UK, with the number of first-time buyers down 7%.

 

Table 2: Number of first-time buyers by nations and regions

Region2012201720212022*10-year change1-year change
North9,24015,89018,62016,71681%-10%
Yorkshire and the Humber16,41028,59032,90029,63581%-10%
East Midlands14,43026,48029,86027,84293%-7%
East Anglia7,47012,27014,68013,47380%-8%
Greater London35,75040,69053,99048,39035%-10%
South East41,20067,10084,08073,58879%-12%
South West17,01028,68032,03028,16966%-12%
West Midlands16,99030,31033,75030,17278%-11%
North West20,88036,73040,97037,53480%-8%
Wales8,56015,79017,27015,11477%-12%
Scotland18,61033,56035,03031,18468%-11%
N. Ireland5,0109,82012,12010,641112%-12%
UK**211,920345,910405,320362,46171%-11%
Sources: UK Finance and *Halifax estimate for 2022. Nation and regions total does not equal UK due to rounding.

Prices and deposits

In 2022, the average cost of a home for a first-time buyer was up 13% (to £302,010), with average deposits now 21% of purchase price. In cash terms, this means an average £62,470 deposit is being raised by those buying their first home – up 8% on 2021. Despite these significant sums, first-time buyers now account for over half (52%) of all loans on homes – the highest in the last decade.

 

Table 3:  First-time buyers: average price and deposit by nations and regions

 Average House Price 2021 (£s)Average House Price 2022 (£s)Average Deposit 2021 (£s)Average Deposit 2022 (£s)Deposit as % of purchase price 20221 Year % change in Deposit1 Year % change in Average Price
East Midlands215,611238,20841,05842,45118%3%10%
East of England307,614336,71061,11360,16918%-2%9%
London475,498518,900122,348125,37824%2%9%
North East161,699175,09130,52130,19817%-1%8%
Northern Ireland159,107171,42529,91233,19919%11%8%
North West194,175212,60437,19437,48318%1%9%
Scotland173,970189,42838,46841,44222%8%9%
South East327,406362,73067,56968,74919%2%11%
South West256,320281,16754,50755,70820%2%10%
Wales187,390199,35937,17936,82518%-1%6%
West Midlands214,438235,10840,20542,33918%5%10%
Yorkshire and The Humber182,747202,15434,13937,06218%9%11%
UK268,031302,01057,88362,47021%8%13%
Source: Halifax, Rolling 12 months to 31st December 2021, 2022

First-time buyers over 30

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

 

Table 4: Average age of first-time buyers by nations and regions: 2012 vs 2022

RegionAverage Age 2012Average Age 2022
East Midlands3032
East of England3032
London3233
North East2930
Northern Ireland3032
North West3031
Scotland2931
South East3133
South West3031
Wales2931
West Midlands3032
Yorkshire and The Humber2930
UK:3032
Source: Halifax, 12 months to December

Affordability

Average property values for first-time buyers are now around 7.6 times the average UK salary, so it’s no surprise that new buyers are increasingly applying for mortgages in joint names rather than by themselves.

The most affordable area for first-time buyers in the UK is West Dunbartonshire. Using the comparison of the average earnings in West Dunbartonshire (£37,910) to the average first-time buyer house price in the area (£103,957) those getting started on the property ladder need to borrow roughly 2.7 times the average salary.

The least affordable areas in the country are in London. First-time buyers face average house prices of 10 times the average salary if they want to buy in Westminster or Camden.

Tables 5: UK 10 Most affordable Local Authority Districts for first-time buyers, 2022
Local Authority DistrictRegionHouse Price to Average Earnings ratio
West DunbartonshireScotland2.7
InverclydeScotland2.8
North AyrshireScotland2.9
CopelandNorth West3.0
East AyrshireScotland3.0
HyndburnNorth West3.1
South AyrshireScotland3.1
ClackmannanshireScotland3.1
Barrow-in-FurnessNorth West3.2
Blaenau GwentWales3.2
Source: See Notes to Eds

Table 6: UK 10 Least affordable Local Authority Districts for first-time buyers, 2022

Local Authority DistrictRegionHouse Price to Average Earnings ratio
WestminsterLondon10.0
CamdenLondon10.0
HertsmereEast of England9.6
Hammersmith and FulhamLondon9.3
HarrowLondon9.2
BarnetLondon9.0
BrentLondon8.9
IslingtonLondon8.6
HaringeyLondon8.4
OxfordSouth East8.4
Source: See Notes to Eds

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