"With unrealistic house prices and deposits needed to buy a home in today’s market, for many, buying a home and stepping foot on the property ladder feels impossible"
Sellhousefast.uk sought to find out the current state of the first-time buyer housing market, and whether Government schemes and cuts to stamp duty has helped more young people get on the housing ladder.
According to UK Finance, 365,000 buyers bought their first home in 2017 – an increase of 7.4% from 2016 and the highest since the financial crisis in 2007/08. This was most likely assisted by the stamp duty cuts in the November budget, which is expected to save four out of five first-time buyers up to £5,000.
As well as this, real estate company Savills found that the ‘Help to Buy’ scheme helped almost 40,000 first-time buyers across England access home ownership in the year to March 2017; accounting for around one in five new homes purchased by first-time buyers.
How much are homes on average for first-time buyers?
Per a recent report from Halifax, Sellhousefast.uk has analysed the average price for a typical first-time buyer home in England and Wales. They found that the average first-time buyer will pay £212,079 in the UK, and £200,166 in England and Wales.
The North East has the cheapest average price, at just £126,437 for a first-time home, in front of Wales who pay £139,875 – a staggering
£13,438 difference. A first-time property in Yorkshire and the Humber is priced closely behind Wales at £139,970, followed by the North West at £149,990.
The average first-time buyer home in the East Midlands costs around £163,005, followed by the West Midlands at £168,627. The South West surpasses the £200,000 mark, costing first-time buyers £205,333 – a staggering £36,706 more than the West Midlands. The South West is closely trailed by £207,103 by East Anglia, and the South East of England soars to £278,749.
However, perhaps unsurprisingly, Greater London is the most expensive region to purchase a first-time home, setting you back a staggering £422,580 – £296,143 more than the cheapest region, the North East.
What do young people think?
In addition to investigating the regions where homes are most and least affordable for first-time buyers, Sellhousefast.uk also identified what the next generation think they know about the property market.
Sellhousefast.uk found that from the Halifax report, over a quarter (27%) of 18 to 21-year-olds believe they will be homeowners by the time they are 25. However, according to Savills, over the last 40 years, the average age of first-time buyers across England and Wales has increased drastically; from 27 in 1977 to 30 in 2017. In London, the average is even higher, at 31 years old.
Further to this, a quarter of 15 to 17-year-olds expect to save for 20 years for a deposit for a house, and 23% of 18 to 21-year-old men believe a deposit of between £5,000 and £10,000 would be enough to buy a home, compared to just 5% of women. Sellhousefast.uk found from a Savills report that the average deposit paid for a first home was £1,094 in 1977, £2,200 in 1997 and £25,867 last year – an increase of 2264% from 1977 – emphasising just how difficult it is for first-time buyers to get on the property ladder.
One in five 11 to 21-year-olds in London think they can purchase a home from as low as £50,000 to as high as £200,000. Perhaps most interestingly, a concerning one in 10 18 to 21-year-olds think stamp duty is money to pay for stamps.
Robby Du Toit, Managing Director of Sellhousefast.uk, commented: “As the next generation begins to consider flying the nest and become homeowners for the first time, it can feel incredibly daunting. With unrealistic house prices and deposits needed to buy a home in today’s market, for many, buying a home and stepping foot on the property ladder feels impossible.
However, this is where the Government has helped. Schemes such as Help to Buy and changes to stamp duty for first-time buyers is proving to be extremely helpful – even saving anything up to £5,000, which is especially useful when living in London, where first-time buyers can expect to pay over £400,000 for a home.”
