FTB age gap revealed in new report
A new report from Halifax has found that the average age of a UK first time buyer is now 30.
However, according to the data, this figure masks a seven-year age gap among those coming on to the housing ladder – with the youngest FTBs based in Carlisle aged 27 and the oldest, aged 34, in areas including Slough in Berkshire and the London boroughs of Barnet and Ealing.
Other places where the average age of a first time buyer is significantly below the national average are Redditch in the West Midlands and Newark and Sherwood in the East Midlands, at 28 years old. First time buyers have an average age of 28 in three areas in Yorkshire – Doncaster, Barnsley and Calderdale.
The youngest first-time buyers in southern England are in Waveney in Suffolk and Broadland in Norfolk with an average age of 28 in both areas. Portsmouth and neighbouring Gosport have the youngest first time buyers in the South East, at 29. The youngest first time buyers in the capital are in Lambeth with an average age of 30 years old.
The analysis reveals a strong relationship between areas with relatively low average house prices with the youngest first time buyers. All 10 areas with the youngest first time buyers have prices below the national average of £200,754. Seven of these 10 have an average house price of between three quarters and half the national average.
Chris Gowland, mortgages director at Halifax, said: “The majority of areas in the country where the average age of first-time buyers is two to three years below the national average of 30 are outside southern England, mostly locations where house prices are typically lower both in monetary terms and in relation to earnings, factors that help to reduce the size of the deposit needed.
Our latest Halifax Generation Rent report found that non-homeowners aged 20-45 would be prepared to save for around five and a half years for a deposit, while the average deposit paid by first-time buyers increased by 13% in 2015 to £32,927. With the youngest average first time buyer age dropping to 27 in some areas, this is a stark reminder of how early aspiring homeowners should start thinking about what they will need to get onto the property ladder and what options they should consider in order to take their first step.”
Typically, the areas with the youngest first time buyers are areas where housing affordability conditions are relatively favourable. Nine of the 10 local areas with the youngest buyers have an average house price to average earnings ratio for first time buyers below the national average of 5.8, except for Redditch (6.3). Seven areas have a price to earnings ratio below 5.0, while Barnsley (3.9) and Doncaster (4.0) have the most affordable housing amongst the 10 areas.
The top 10 areas with the oldest first time buyers are all in the south east of England. Nine of these – including the London boroughs of Barnet, Ealing, Richmond and Hounslow – all have an average age of 34, the highest in the country.
They have an average house price paid by first time buyers above the national average with the exception of Hastings. Richmond upon Thames, Brent, Barnet and Ealing all have an average price of more than double the national average. The house price to earnings ratio is above the national average of 5.8 in all 10 areas.
The average age of a first time buyer has risen over time to 30 in 2016 – one year older than a decade ago and two years older than in 1983 when Halifax records began. The average age in London has risen by three years since 1983 (29 to 32) and by four years in the South East (28 to 32).
Government schemes and the increasing contribution from the Bank of Mum and Dad are likely to have prevented a sharper rise in the average age of FTBs. The CML estimates that 62% of first-time buyers in 2014 became home-owners either with assistance from relatives or the Help to Buy schemes