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First time buyers dominate the 2017 mortgage market

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First time buyers make up nearly half of all houses purchases financed by a mortgage, but those taking their first step on to the property ladder in London need to put down, on average, a deposit of almost £107k, according to the Halifax First-Time Buyer Review. 

In the first six months of the year, the proportion of all house purchases with a mortgage across the UK made by homeowners getting on to the property ladder for the first time rose to an estimated 47%, with the share growing from 44% since the launch of the Help to Buy scheme in April 2013. 

Whilst the number of sales as a whole has slowed, first-time buyers have formed a fundamental part of the UK property market which is dependent on buyers being able to get on to the property ladder.  

The increase, has seen the number of first-time buyers grow from 154,200 in the first half of 2016, to 162,704 during the same period of 2017, the highest levels seen since the financial crisis struck in 2007. 
 
Martin Ellis, a housing economist at Halifax, said ‘Although the number of first-time buyers grew at a slower rate in the first half of the year compared to 2016 the levels remain healthy and the market is achieving record average house prices for first-time buyers’.

He continued ‘High levels of employment, low mortgage rates and government schemes such as Help to Buy have also helped these numbers remain robust’. 

Halifax also found the national average first-time buyer deposit was £32,899 in the first six months of 2017 – 16% of the purchase price, whilst in London the average first-time buyer requires a deposit more than three times the national average at £106,577. 

As a result of the higher property prices, there are also signs of first-time buyers stretching their mortgage terms out for longer than the traditional 25-year term.  In 2007, 48% of first-time buyers had a mortgage term of between 20 and 25 years, whilst 38% were for between 25 and 35 years. In 2016, this mix has markedly reversed, with 56% of mortgages at a term of 25 to 35 years or more, while the 20 to 25 year mortgage terms have fallen to 26%.

Halifax First-Time Buyer Review, 2017


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Nick has more than 20 years’ experience within the property research arena.

Nick Barnes

Nick Barnes

St Magnus House

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