Property: UK is just one big first-time buyer blackspot

8th August 2011

The property portal's survey of 14,125 potential buyers found that seven out of the 11 UK regions are now a slump in first-time buyers as living costs rise and financial uncertainty continues.  Buyers also reported difficulty raising a deposit and difficulties with property being "overpriced".

Rightmove found that of all respondents who intended to purchase property in the next 12 months, only 23% were doing so for the first time. This is down from 26.2% in the previous quarter and well under the pre credit-crunch norm of 40%.

Rightmove commercial director Miles Shipdale said that the figures had "serious implications", with the regional spread of the results causing even greater concern.

Yorkshire and Humberside, the south-east, the east Midlands, East Anglia, Wales, the south-west and Scotland all registered first-time buyer levels of below 20%, making them officially "blackspots".

London is bucking the national trend, however. 41.2% of those intending to buy in the capital were doing so for the first time.

42% of first-time buyers said raising a deposit was their biggest problem, despite the number of mortgage products targeting first-time buyers having increased 11-fold since July 2009. Over the same period, first-time buyer levels have dropped from 30.8% to 23%.

However, the Rightmove figures are contradicted by a report out from Halifax which says the number of UK towns affordable to first-time buyers is at its highest since 2003.

The Halifax First-Time Buyer Review classifies a local authority district (LAD) as affordable if the average house price for a first-time buyer is lower than the price someone on average earnings in the area can pay based on the historical average house price to income ratio of 4:1.

The average house price paid by a first-time buyer in June 2011 was affordable for someone on average earnings in 48% of all local authority districts (LADs). This is the highest proportion of housing affordable for first time buyers in eight years, and compares with 40% in 2010 and just 6% in 2007.

Most – 80% – of affordable LADs are in the North of England with just 20% in the South. The North East is the only UK region where all LADs are affordable for first-time buyers according to Halifax. In contrast, London is the only region with no affordable areas for first time buyers on average earnings.

Suren Thiru, housing economist at Halifax, says: "It is encouraging that housing affordability for first-time buyers in general has improved significantly over recent years, as a consequence of the marked falls in both house prices and interest rates since 2007. However, there is a distinct North-South divide within this improvement as the majority of affordable areas are in the North."

 

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