The latest Halifax First-Time Buyer Review found that there were an estimated 139,500 first-time buyers (FTBs) in the first six months of 2015.
Compared with the same period in 2014 this represents an estimated 7% reduction in purchases (from 149,500) – the first annual decrease on this basis since the first half of 2011. However, with the exception of 2014 it was still the highest total for the first six months of the year since 2007 and was 92% higher than the market low recorded in the first half of 2009 (72,700).
And despite the decline in purchases by FTBs this year as a proportion of all mortgage financed house purchasers the proportion remains steady (also down 7%). In fact, the number of FTBs has increased more rapidly than the number of subsequent buyers over the past few years, from 38% in 2011 to 47% in 2015.
The average FTB deposit in May 2015 was £29,8942 – 6% higher than in May 2014 (£28,191). This rise in the deposit largely reflects the increase in house prices over the past year. The average FTB deposit is now £13,494 (82%) higher than in 2007 (£16,400).
The recent changes to the stamp duty system have saved the average FTB £716, reducing the tax bill for someone buying the average priced FTB property of £178,370 from £1,783 to £1,067. Savings for the average FTB in London are much bigger than this with a reduction in the stamp duty bill for the average FTB property in the capital (of £342,313) of £3,154 from £10,269 to £7,115.
Craig McKinlay, Mortgages Director at Halifax, commented: “There was a modest decline in the number of first-time buyers in the first half of the year following the substantial increases recorded in 2013 and 2014. This fall has been in line with the general softening in market activity.
However, there are now signs of a pick-up in mortgage activity as the economy continues to recover and mortgage interest rates remain at very low levels. These factors could boost the number of first-time buyers during the second half of the year.”
