In order to provide you with the best online experience this website uses cookies. By using our website, you agree to our use of cookies. Close More Info

Property News

First time buyers: Scotland leads the way for affordability

Housing affordability has been a theme in these Nethouseprices columns recently, with several organisations publishing research on the topic. Just this week, we looked at the latest Lloyds Bank Affordable Cities Review which found, unsurprisingly, that cities in the southern half of the UK are generally less affordable than their more northerly counterparts. Property prices in Scotland's cities, the report found, are among the most accessible to aspiring homeowners. Halifax has now published its annual First Time Buyer Review, a study which underlines just how much better young people north of the border fare when looking for their first homes. In this short feature, we set out the headlines of the Halifax review, before looking at some of its more detailed regional observations.

Halifax First Time Buyers Review: UK headlines

- The number of first time buyers (FTBs) reached 359,000 in 2017, the largest volume recorded in ten years, despite the average deposit having doubled from £17,749 to £33,339 during the same period.
- Reflecting the rapid rise in house prices in the UK during the past few years, the average price paid by a first time buyer in 2017 was £212,076, a startling 21 per cent increase from the £174,703 reported in 2007.
- First time buyers now account for almost half of all sales with a mortgage. The figure in 2007 was just 36 per cent.
- There is yet another demonstration of the pressing affordability challenges facing first time buyers in London. In 2007, they accounted for 57,000 recorded sales in the capital. This figure had fallen 26 per cent to 42,985 by last year. The North East was the only other region seeing an appreciable decline - five per cent - in this regard.


Regional affordability comparison

North East England:

Average house price = £126,437
Average mortgage = £108,003
Average deposit = £18,435
Deposit as percentage of price = 15

Yorkshire and Humberside:

Average house price = £139,970
Average mortgage = £119,292
Average deposit = £20,678
Deposit as percentage of price = 15

North West England:

Average house price = £149,900
Average mortgage = £127,841
Average deposit = £22,148
Deposit as percentage of price = 15

East Midlands:

Average house price = £163,005
Average mortgage = £138,544
Average deposit = £24,462
Deposit as percentage of price = 15

West Midlands:

Average house price = £168,627
Average mortgage = £143,248
Average deposit = £25,378
Deposit as percentage of price = 15

East Anglia:

Average house price = £207,103
Average mortgage = £171,640
Average deposit = £35,463
Deposit as percentage of price = 18

Wales:

Average house price = £139,875
Average mortgage = £121,278
Average deposit = £18,596
Deposit as percentage of price = 13

South West England:

Average house price = £205,333
Average mortgage = £169,044
Average deposit = £36,289
Deposit as percentage of price = 18

South East England:

Average house price = £278,479
Average mortgage = £227,292
Average deposit = £51,547
Deposit as percentage of price = 18
Greater London:

Average house price = £422,580
Average mortgage = £309,977
Average deposit = £112,604
Deposit as percentage of price = 27

Northern Ireland:

Average house price = £120,648
Average mortgage = £103,012
Average deposit = £17,636
Deposit as per cent age of price = 15

Scotland:

Average house price = £140,010
Average mortgage = £118,550
Average deposit = £21,460
Deposit as per cent age of price = 15

United Kingdom overall:

Average house price = £212,079
Average mortgage = £178,740
Average deposit = £33,339
Deposit as per cent age of price = 16

Source: Halifax First Time Buyer Review 2018. The lender uses its own housing data and official statistics from such sources as the ONS and HMRC in the preparation of this report.



Most affordable local authority districts in the UK for first time buyers

Copeland, North West England:
Price to earnings ratio = 2.9

Stirling, Scotland:
Price to earnings ratio = 3.0

North Ayrshire, Scotland:
Price to earnings ratio = 3.1

Pendle, North West England:
Price to earnings ratio = 3.1

Inverclyde, Scotland:
Price to earnings ratio = 3.2

West Dunbartonshire, Scotland:
Price to earnings ratio = 3.2

Renfrewshire, Scotland:
Price to earning ratio = 3.4

East Ayrshire, Scotland:
Price to earnings ratio = 3.4

Lanarkshire, Scotland:
Price to earnings ratio = 3.4


Local authority districts in the UK with the least affordable housing for FTBs


Brent, Greater London:
Price to earnings ratio = 12.9

Newham, Greater London:
Price to earnings ratio = 12.0

Haringey, Greater London:
Price to earnings ratio = 11.5

Hackney, Greater London:
Price to earnings ratio = 11.3

Harrow, Greater London:
Price to earnings ratio = 11.2

Hillingdon, Greater London:
Price to earnings ratio = 10.9

Waltham Forest, Greater London:
Price to earnings ratio = 10.8

Lambeth, Greater London:
Price to earnings ratio = 10.7

Southwark, Greater London:
Price to earnings ratio = 10.7

Ealing, Greater London:
Price to earnings ratio = 10.5

Reaction

Russell Galley, Managing Director of Halifax Community Bank, said that the overall figures for the UK were encouraging, as new buyers are central to the long-term health of the country's housing market. No one is likely to disagree with this assertion. It is indeed heartening to see young people surmounting the obstacles of rising property prices and deposit requirements, tougher mortgage-lending rules and sluggish wage growth. Supporters of the government's help-to-buy programme will, of course, point to the report as proof positive that the policy is working as intended. Others, however, might view the figures for London as providing evidence that the measure has an unequal geographical application and is of little practical help to aspiring homeowners in the capital, where property is so expensive.

Once again, we are fascinated with the figures for local authorities in Scotland. As we said when discussing the earlier Lloyd's Affordable Cities Review, the concentration of Scottish locations at the top of the "most affordable" table might be greeted with mixed feelings. Existing homeowners might wish that their properties had appreciated in value as quickly as in other parts of the UK. This is understandable. Even the most altruistic among us take a certain pleasure in seeing our house valuation increase. However, young people will be delighted to see that housing in their country is relatively affordable and accessible to those who need it.

Visit Nethouseprices again soon for our coverage of the next Halifax index of house prices in the UK.

You can also sign up to our newsletter and join Nethouseprice’s community of over 190,000 members who get regular property tips, relevant offers and news, click here  http://nethouseprices.com/auth/user-register

Source: Nethouseprices.com 08.02.18

Make a comment

Please use the comment box below. Please login first or create an account.
user avatar

Register For Free

Create an account for free today to unlock some great features of Net House Prices.

Instant House Valuation