Average first-time buyer deposits up by £10k on 2020
The total number of first-time buyers fell by 13% in 2020 – as a knock-on effect of the first lockdown during the spring – but bounced back in the second half of the year, according to latest housing market data.
Halifax reports that the total number of people buying their first home fell by 46,000 to 304,657 when compared to 2019 figures. First-time buyers paid, on average, £256,057 in 2020 – up by 10% or £22,939 year on year.
Unsurprisingly, Londoners spent the most for their first home, paying, on average, £489,098 – a 7% rise on prices in 2019.
However, in the second half of 2020, first-time-buyer transactions bounced back and went up by 52% from 121,050 in the first six months of the year to 183,607 once the market reopened.
The number of first-time buyers as a proportion of all homes bought with a mortgage remained stable in 2020 at 50%, compared with 51% in 2019.
The average age of a first-time buyer in the UK is now 31 – just a year older than it was in 2010. Russell Galley, managing director of Halifax, said: “While these figures confirm the almost inevitable fall in the overall number of first-time buyers in 2020 – with the entire housing market effectively shuttered during the first national lockdown – they also underline just how strong the bounce back was in the second half of the year.
“Despite the obvious challenges presented by soaring house prices, not least the need to raise an even bigger deposit, first-time buyers still accounted for half of all home purchases, a reassuring statistic given their overall importance to the market.”
What was the average first-time deposit paid?
First-time buyer put down a deposit of £57,278, on average, in 2020. This compares to £46,449 in 2019 – a rise of over 23%
Deposits for first homes in London went up by 18%, from £110,145 in 2019 to £130,357 last year.
Wales saw the biggest increase in average first-time buyer deposits – up by 25% (£6,634), from £26,029 to £32,663.
Which areas are most affordable?
Halifax compared average earnings to average house prices to work out the most affordable areas for first-time buyers.
Eleven of the 20 most affordable areas were in Scotland. The most affordable area was Burnley, in the North West, where people paid 3.1 times their earnings for their first home. This was followed by North and East Ayrshire, in Scotland, at 3.2. Middlesbrough and Doncaster also featured on the list – both at 3.9.
Which areas are least affordable?
Sixteen of the 20 least affordable places for first-time buyers were in London, with Islington recording the highest house price to earnings ratio of 11.9, followed by Brent (also 11.9) and Hackney (11.8). Outside London, the least affordable areas were Oxford (10.3), Slough (10.0.), Hertsmere, in the East of England, and Cambridge were also on the list.
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