Transactions bounced back strongly for first time buyers in the second half of 2020 despite a 10.0% rise in house prices.
Despite the average 10.0% rise in house prices during 2020 first time buyers bounced back strongly up 52% from 121,050 to 183,607 in the second half of the year, according to Halifax.
Over the year first time buyer numbers were down -13% to 304,657 compared to 351,260 in 2019 although comparing the last six months the numbers were lower by only -2%.
The biggest fall in numbers was for Northern Ireland down -23%, Wales lower by -23% and Scotland by -21% whereas London was down the least at -6% over the year.
Average deposits rising for buyers
Throughout the UK the average deposit for first time buyers was £57,278 increasing 23% or £10,829 last year with the highest amount by value in Greater London up 18% at £20,211.
This table from Halifax first time buyer deposits and how these have changed from 2019 to 2020.
| Town | Deposit | Change % |
Change £ |
|---|---|---|---|
| Wales | £32,663 | 25% | £6,634 |
| North | £29,563 | 24% | £5,775 |
| West Midlands | £42,062 | 24% | £8,054 |
| South West | £51,397 | 21% | £8,893 |
| Yorkshire & Humber | £33,313 | 19% | £5,305 |
| South East | £64,910 | 19% | £10,256 |
| Scotland | £35,745 | 19% | £5,644 |
| Greater London | £130,357 | 18% | £20,211 |
| East Anglia | £51,126 | 18% | £7,652 |
| East Midlands | £39,052 | 17% | £5,783 |
| Northern Ireland | £29,523 | 17% | £4,196 |
| North West | £34,347 | 16% | £4,829 |
Buyers in Wales had the biggest percentage change up 25% or £6,634 with average deposits of £32,663 followed by the North and West Midlands up 24%.
This would apply to buy-to-let investors as they would need to compete with higher prices and have the resources to place a larger deposit.
The largest average deposit is Greater London with £130,357 followed by the South East requiring £64,910 which has increased by £10,256 over the year.
See how much you can borrow and stamp duty to get on the property ladder for your first home at this link:
First time buyer calculator with instant results and figures for your new home.
Help with increasing deposits comes from family members can access cash using a lifetime mortgage if you have an acceptable property for equity release and gift to a child or grandchild.
House price growth strong in 2020
The recovery in demand after lockdown during 2020 has kept house prices rising with average values for first time buyers increasing 10% or £22,939 and house prices at £256,057.
As a percentage the biggest rise in house prices was the West Midlands up 11% or £19,565 increasing from £185,682 to £205,246 and the smallest is Scotland rising only 1%.
Greater London had the largest rise in house prices by value of £33,486 or 7% with average prices rising from £455,611 to £489,098.
For home movers intending to trade up for a larger property during times of rising values, they would require having a larger deposit or increase their mortgage.
If you are a remortgage buyer in London the rise in house prices can let you release capital for home improvements such as a loft conversion to create extra space for an office.
The least affordable local authorities are all in London with Islington and Brent with house prices 11.9 times the local average earnings, then Hackney on 11.8 and Haringey with 11.5 times.
What are your next steps?
Call our LCM mortgage brokers for advice if you are a first time buyer getting on the property ladder. Learn more by using the property value tracker chart, mortgage costs calculator and equity release calculator.
Start your free first time buyer quote and we can find the best mortgages and lowest rates for your new property at this link:
Free first time buyer mortgage quote with the lowest rates to purchase your first home.
For equity release buyers our London City Mortgage advisers can make recommendations with the lifetime mortgage quote allowing you to receive cash from your property for home improvements, holidays or purchase a new car.
