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First time buyers hit 23-year high

First time buyers now make up the majority of homes purchases with a mortgage, according to new figures.

They have become the dominant force in the housing market for the first time in 23 years with 372,000 people buying their own home in 2018.

The new figures are unveiled in the latest First Time Buyer Review from the Halifax bank.

First-time buyers now account for just over 50 per cent of all house purchases with a mortgage, according to the bank.

It says that the average price paid for a typical first home has gone up by 39 per cent from £153,030 in 2008 to £212,473 in 2018.

Meanwhile, the average deposit has increased by 57% from £21,133 to £33,252 over the same period.

The year 2008 has become a benchmark as just 38 per cent of all houses purchases with mortgage were first time buyers – and the number of first time buyers hit a record low of 192,300.

Russell Galley, who is managing director at the Halifax, said: “New buyers coming on to the ladder are vital for the overall wellbeing of the UK housing market, and the continued growth in first-time buyers shows healthy movement in this important area – despite a shortage of homes and the ongoing challenge of raising a deposit.

“Last year was the first year that first-time buyers accounted for the majority of the market since 1995, which shows that the factors reducing some of the associated costs – such as continued low mortgage rates and Stamp Duty – are supporting the increasing number of people taking their first step on to the property ladder.”

The Halifax First-Time Buyer Review is based on figures from industry group UK Finance, as well as its own house price database and Office for National Statistics earnings figures.

Terraced houses, closely followed by semi-detached properties, have continued to be the first-time buyer’s home of choice over the past decade. They made up two-thirds of mortgages for first homes in 2018.

The average age of a first-time buyer in 2018 remained at 31 – two years older than a decade ago.

The top 10 most affordable local authority districts (LADs) in the UK were all in the North West and Scotland.

The most affordable were Pendle in Lancashire, Copeland in Cumbria with an average property price of £88,852 (Pendle) and £110,930 (Copeland), 2.6 times the local average gross annual earnings.

Of the 10 least affordable LADs, nine were in London. The least affordable was Brent where the average first-time buyer property price of £500,088 was 13.3 times the gross average annual earnings for that area.

For the South West, including Dorset, the figures show (with national figure in brackets):

Average house price: £210,200 (£212,473) – fourth highest out of 12 UK areas

Average mortgage: £173,071 (£179,631) – fourth highest out of 12 UK areas

Average deposit: £37,128 £32,841) –third highest out of 12 UK areas

Deposit a percentage of purchase price: 18 per cent (15 per cent) –third highest out of 12 UK areas

Don’t forget to join our Home Ownership Register if you are seeking to buy or rent a new home in north, south or west Dorset.