First time buyer numbers fall again

24-Dec-2007

The annual Halifax First Time Buyer Review has revealed that there were just 300,000 first time buyers purchasing properties of their own in 2007 - the lowest figure since 1980.

The study, now in its fifth year, has revealed that the average price of a typical new buyer home has risen by some 82 per cent over that period, with 466 out of the UK's 483 towns now adjudged to be unaffordable in terms of average house prices.

The types of property being bought are also changing as buyers look to purchase whatever home is possible, the study suggested. The proportion of buyers purchasing a flat, 37 per cent, was equal to the proportion purchasing a terraced house in 2007, the research revealed - the first time that this has happened.

However, Halifax chief economist Martin Ellis did provide some hope for new buyers, suggesting that most are still able to save for a deposit, and adding that shared equity schemes and the like could eventually help the market.

"Despite the increase in property prices in the past few years, the financial position of the majority of first time buyers is sound and they, on average, put down a 20 per cent deposit, which is equivalent to more than a year's earnings," Mr Ellis outlined.

"There is no quick fix to the first time buyer problem. A more subdued housing market over the next few years is a positive step for potential new entrants. Lower than average earnings house price growth together with more government initiatives may, in time, address the issue," he added.

Lower interest rates may also help matters - the Bank of England is now widely expected to lower rates to five per cent during 2008.

First-time buyers taking unusual steps to secure elusive first home.


New buyers warned not to get ahead of themselves

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