Number of first time buyers fell 11% in 2022, says Halifax, as data reveals the average buyer needs a £62,500 deposit to get onto the ladder
The number of UK first-time buyers dropped by 11 per cent in 2022, according to new data from Halifax, as the average deposit required soared to almost £62,500.
Overall, 362,461 buyers made it on to the housing ladder last year, with the year-on-year fall following a record level seen in 2021.
Average property values for first-time buyers are now around 7.6 times the average UK salary, Halifax said.
In 2022, the average cost of a home for a first-time buyer rose 13 per cent to £302,010, with average deposits now 21 per cent of purchase price.
This means on average a first-time buyer needs to raise £62,470 for a deposit in order to buy a home, 8 per cent more than in 2021.
Nearly two thirds of first time home purchases are now done in joint names
In 2021, the ‘race for space’, built up demand during the pandemic and the stamp duty holiday, led to a record number of buyers getting the keys to their first home.
The 2022 fist-time buyer figure remained above pre-pandemic levels and was the highest figure since 2016.
However, Halifax’s data did reveal that buying a home is becoming less affordable. It said that almost two thirds (63 per cent) of mortgage completions are now in joint names, with two or more people.
This may be due to deposit and mortgage affordability constraints, which remain the biggest barrier to first-time buyers owning their own property.
Data from Nationwide has shown that first-time buyer homes are the least affordable they have been since 2008, as mortgage payments eat up 39 per cent of a buyer’s salary.
However, despite these hurdles, first-time buyers now account for over half (52 per cent) of all loans on homes – the highest in the last decade.
The number of first time buyers in 2022 exceeded figures seen pre-pandemic
The most affordable area for first-time buyers in the UK is West Dunbartonshire in Scotland, with buyers needing to borrow roughly 2.7 the average salary in order to buy.
The least affordable areas in the country are in London. First-time buyers face average house prices of 10 times the average salary if they want to buy in Westminster or Camden.
Needing to save a larger deposit means that the average age of a first-time buyer is on the rise. A decade ago, the typical first-time buyer in the UK was aged 30, but that has now risen to 32.
For first time buyers the average deposit needed to get on to the ladder is now over £62,000
Kim Kinnaird, mortgages director at Halifax, said: ‘Over 362,000 people got on the property ladder in 2022, with first-time buyers now accounting for over half of all home loans.
‘Buyers looking to make their first step onto the property ladder may welcome the forecasted fall in house prices this year – providing the supply is there. Nonetheless, the cost of purchasing a home is still significant and saving for a deposit can be challenging for some first-time buyers.
‘The length of time needed, and cost of, raising a deposit are likely having an impact on the profile of the average first-time buyer over time. Today, those starting out on the housing ladder are 32 years old, on average – two years older than a decade ago – and almost two thirds of people are now getting their first mortgage in joint names.’
