The average first time buyer in the UK is now 30-years-old and 32 in London, according to the latest Halifax First Time Buyer Review.
The report warns that rapidly rising house prices and sky-high rents are making it increasingly difficult for private tenants to get onto the property ladder.
The study also found that first time buyers in the capital are now putting down an average deposit of £96,000 – almost three times higher than the UK average of £34,000, where first time buyers are generally able to get onto the property ladder two years earlier than in London.
Average First Time Buyer Age Rises to 30
Rising house prices
The price of the average first time buyer home in the UK increased by 12% in the last year to reach just under £200,000. This rises to £385,000 in London and £257,000 in the South East.
Londoners will not be surprised to learn that the ten most expensive areas of the country to buy a first home are all in the capital, with Brent being the least affordable borough for first time buyers. Its average price of £460,000 is 12.5 times the average annual earnings of a typical buyer.
Across the capital, the average first time buyer deposit was 25% of the purchase price, compared with 17% in the rest of the UK. Halifax believes that Londoners opt for a higher deposit in an attempt to keep monthly mortgage payments as low as possible. Although higher wages in the capital might account for first time buyers being able to save more, the report adds that many are receiving more help from the bank of mum and dad than those in the rest of the country.
All first time buyers in London were liable for Stamp Duty, which applies to properties costing over £125,000, with 85% paying more than £250,000 for their homes.
More first time buyers
However, it’s not all bad news – the number of first time buyers rose by 10% over the first six months of this year, compared with the same period in 2015, with almost 155,000 people buying their first home in the first half of 2016.
The Mortgages Director at Halifax, Chris Gowland, comments: “This rise has been broadly in line with a general improvement in market activity and is likely to have been helped by Government measures including the Help to Buy scheme.
“Although numbers remain below their previous peaks and many potential first time buyers are facing escalating house prices and deposit sizes, record low mortgage rates continue to make buying seem a more attractive option than renting.”
Although the outlook for first time buyers appears more positive, many are still forced to rent privately while they save. It is vital that good landlords look in the right parts of the country to invest, so that they can provide the safe, secure and high standard properties that generation rent needs.