The latest Halifax First-Time Buyer review brings the good news that in 2018 first-time buyers made up the largest percentage of home-buyers for the first time in almost quarter of a century.
Further confirmation of an established trend
Although 1995 was the last year in which first-time buyers made up the majority of home purchasers, their numbers did not drop to a record low until (unsurprisingly) 2008, during which year they were responsible for only 38% of all purchases.
It took until 2011 for the numbers of first-time buyers to start on what we can now recognize as a steady, upward trend. For the sake of clarity, the term “steady” refers to the fact that the numbers of first-time buyers have increased every year since that point, but they have done so to varying degrees depending on the year. For example, in 2016 their numbers increased by 9% and in 2017 they increased by 7.6%, whereas in 2018 they only increased by 2%, however, realistically, this taper off is only to be expected since there is only so long that strong growth can be sustained.
Deposits remain an issue
Back in 2008, the average deposit was 14% of the purchase price. This jumped to 20% in 2009 as lenders battened down their hatches and has been gradually coming down ever since. In 2018 it stood at 15%.
While this is not a huge difference in percentage terms, in terms of money put on the table, it translates as an increase of 57% or £12,119 (from £21,133 to £33,252) as, of course, house prices have risen over the last ten years. Specifically, they have raised an average of 39% or £59,443 (from £153,030 to £212,473). Of course averages only tell part of the story. There are massive variations between different UK property markets. For example, in Wales, first-time buyers only pay an average deposit of £16,449 whereas in London they have to find no less than £110,656.
First-time buyers are both older and more interested in houses than starter flats
In a sign that millennials are opting to make the most of their twenties and only take on the responsibility of property ownership when they are entering their thirties, the average age of first-time buyers in most of the UK is now 31, whereas in 2008 it was 29 in the UK mainland and 28 in NI. The exception to this is London, where the average first-time buyer is aged 33. This is, of course, also the time when many people are at least thinking about starting a family, which accounts for the fact that today’s generation of first-time buyers increasingly prefer terraced and semi-detached houses to the “starter flats” of previous generations (which they probably rented in their twenties).
What is particularly interesting about these figures is that they demonstrate that the younger generation does still have confidence in the UK and does continue to see it as a good place to live (and in which to raise children) regardless of how they feel on the issue of Brexit.
Author Bio: Indlu are Denton estate agents in Manchester, offering a no sale, no fee estate agency service. For more information or to complete your free online house valuation, please contact Indlu today.