The average deposit for a first time buyer has fallen to 15%, making home ownership the most affordable it has been for eight years, new research suggests.
Despite this glimmer of hope for potential homeowners, the total number of first time buyers is at its lowest level since 1974!
To make matters worse, the North-South divide continues to deepen with 75% of areas in the North considered to be affordable compared to just 5% of areas in the South.
The new Halifax First Time Buyer Review has highlighted that affordability for first time buyers is at its best level since 2003. The average property price paid by new buyers in November 2011 was affordable for someone on average earnings in 44% of all local authority districts (LADs).
In comparison to 2010, when the affordability rating was at 42% and just 5% at the peak of 2007, the housing market has eased up for new buyers.
The North-South divide continues to widen though and 95% of all the UK LADs that are affordable for first time buyers are in the North, compared to just 5% in the South. Yet the number of first time buyers is at its lowest level since records began in 1974.
Halifax estimates that there were around 187,000 first time buyers in 2011, which is 7% lower than 2010 figures and less than half of 2006 figures.
Martin Ellis, Housing Economist at Halifax, said; “Housing affordability for those looking to get onto the property ladder for the first time has improved significantly over recent years, largely as a consequence of the decline in house prices since 2007.î
ìNevertheless, conditions for potential first-time buyers remain tough. Difficulties raising the necessary deposit and concerns over the economic climate are preventing many from entering the market.”
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