Oakhill logo

2015: Over 300,000 first time buyers for second year in succession

Search for properties

To buy or to rent?

Property type

Minimum price

Maximum price

Minimum bedrooms

Mon 18 Jan 2016

2015: Over 300,000 first time buyers for second year in succession


The Halifax has revealed that during 2015, first-time-buyer numbers hit 310,000.

Although this represents a marginal decline (-0.5%) from 311,700 in 2014 - the first annual decline in the number of first-time buyers since 2011 - the number has grown by almost two-thirds (60%) since 2011, from 193,700 to 310,000. The marginal decline in first-time buyers is in line with general residential house purchases, and is partly due to lack of supply.

The average price paid by first-time buyers increased by 10% in 2015, from £172,563 to £190,180; taking the price above the previous peak in 2007 (£174,994) for the first time.

The average first-time buyer deposit in 2015 was £32,927; 13% higher than in 2014 (£29,094) and 88% higher than the average deposit in 2007 (£17,499). In the South East the average deposit paid rose by 24% in the past year, from £35,582 to £44,024.

Whilst a mortgage term of 25 years has been the norm for some time, many first-time buyers are increasingly taking out mortgages where payments are spread over a longer period. In 2007 the proportion of first-time buyers taking up a 35-year mortgage stood at 16%. By 2015 this figure had grown to over one-in-four (26%). Over the same period, the share of mortgages with a 20 to 25 year term dropped from 48% to 30%.

Despite higher house prices, the proportion of disposable earnings devoted to mortgage payments by a first-time buyer stood at 32% in 2015 Q3. This is a substantial improvement compared with the summer of 2007 when this figure reached a peak of 50%. Record low mortgage rates, coupled with earnings growth, are the key drivers behind this improvement.

Craig McKinlay, Mortgages Director at Halifax, commented: "For the second year in succession, the number of buyers getting on the first rung of the housing ladder has reached 310,000. Although the average price of the typical first-time buyer home has grown by 10% in the past year, the number of buyers taking that first step onto the housing ladder has been supported by favourable economic conditions; namely, record low mortgage rates, rising employment and real pay growth.”

First-time buyers accounted for 46% of all house purchases made with a mortgage in 2015; the same as in 2014. This share has grown from 36% at the start of the housing downturn in 2007.

First-time buyers were also boosted by Stamp Duty changes in December 2014. The largest saving is made by first-time buyers in London with someone buying at the average first-time buyer price of £367,990 now paying £8,399 in stamp duty fees compared to £11,039 before the change – a difference of £2,640.


Craig McKinlay continued: "Whilst affordability has improved since 2007, in many parts of the country the ratio of the average house price to earnings is still significantly above the long-term average of 4.0. This is a concern as it could prevent many potential buyers from entering the market."