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Two-thirds of first-time buyers team up to step on the property ladder

First-time buyers accounted for more than half of all home loans in 2023 - and more than two-thirds teamed up to secure their own homes.

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Words by: Annabel Dixon

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Almost two thirds of first-time buyers teamed up last year in a bid to get onto the housing ladder.

Against a challenging economic backdrop, 63% of first-time buyer mortgage completions in 2023 were in joint names, with two or more people. Just 37% were sole applications, according to the latest research from Halifax.

First-time buyers accounted for just over half (53%) of all home loans last year, the highest proportion since 1995. 

But the overall number of buyers that stepped onto the housing ladder last year stood at 293,339 – a 21% drop compared with 2022.

The number of first-time buyers fell in all regions across the UK in 2023, with the greatest drops in East Anglia and the south east.

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What was the average deposit paid by first-time buyers in 2023?

Halifax said it was ‘unsurprising’ that the bulk of first-time buyer mortgage applications were joint, given the increase in deposits over the last decade.

First-time buyers forked out an average deposit of £53,414 last year, around 19% of the purchase price. That’s £9,057 (15%) less than in 2022 but £21,000 (67%) more than 10 years ago.

And even though the typical salary is higher than 10 years ago, first-time buyers have to save more than a year’s average pay for a deposit large enough to buy a first home, according to the lender.

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Terraced homes most popular among first-time buyers

In a glimmer of hope for aspiring homeowners, the average price tag of a home for a first-time buyer fell 5% from its peak in 2022 to £288,136.

But house prices for first-time buyers remain over £132,000 (86%) more expensive than a decade ago.

Halifax’s research also revealed that terraced homes were the most sought-after type of property for first-time buyers in 2023, making up 30% of all first-time buyer mortgages. 

But their popularity has faded over the last decade, with the number of first-time buyers snapping up a terraced home dropping by 7% compared with 2013.

Flats, on the other hand, have risen in popularity. The number of first-time buyers purchasing a flat over the last 10 years has climbed by 6%, increasing in every region and nation in the UK.

Where are the most affordable places to step onto the housing ladder?

First-time buyers should look to Scotland to boost their chances of homeownership. Many of the most affordable places to buy a first home are in Scotland, said the lender. 

Inverclyde was crowned the most affordable area last year, where properties were around 2.6 times the average salary (£41,598). 

At the other end of the spectrum, London was home to some of the least affordable places to get onto the housing ladder. Properties in Islington, north London, were a whopping 10.6 times the average salary (£57,548).

To put these figures into wider context, average property values for first-time buyers are around 6.7 times the average UK salary (£43,257), according to Halifax.

Kim Kinnaird, director, Halifax Mortgages said: ‘Following a record year in 2021, unsurprisingly in view of the wider economic environment, the number of first-time buyers joining the property market fell again in 2023 to around 293,000. 

‘Despite this drop, new buyers made up over half of all home loans. However, to get a foot on the ladder most people are now buying for the first time in joint names.

‘The overall fall in house prices we saw in 2023 will go some way to helping people get on the ladder for the first time – but these buyers are still dependent on a steady supply of properties in their price range, while they are faced with the continued pressure of saving for a deposit, when rent and living costs are high.'

What help is available for first-time buyers?

The good news is that there are a number of schemes designed to help first-time buyers. 

The mortgage guarantee scheme allows buyers to purchase a home with just a 5% deposit. It has been extended until June 2025.

The First Home scheme offers first-time buyers discounts on new-build homes. Meanwhile, Shared Ownership allows buyers to buy a stake in a property and pay rent on the remainder.

The government is also understood to be considering a number of other ways to help first-time buyers.

‘First-time buyers have been hit especially hard by rising mortgage rates. The sub-4% deals we increasingly hear about are typically for those with equity levels of 40% or more,’ explained Tom Bill, head of UK residential research at Knight Frank. 

‘The government is likely to offer first-time buyers more financial support ahead of the election this year given that housing is a key political battleground and based on the belief that homeowners are more likely to vote Conservative.’

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