Global Property Guide

Financial Information for the Residential Property Buyer

Encouraged by government incentives and low mortgage rates, an increasing number of first time home buyers are entering the UK's housing market. Last year they accounted for half of all house purchases with a mortgage, according to Halifax, up from 36% in 2007. 

The number of first-time buyers was at its peak in 2006, but as the housing markets boomed across the U.K. they were priced out. There were 359,000 first-time buyers in 2017 - only 11% below a peak of 402,800 in 2006. 

“A flow of new buyers into home ownership is vital for the overall wellbeing of the UK housing market…This ten-year high in the number of first-time buyers shows continued healthy movement in this key area,” said Russell Galley, managing director at Halifax. 

Record low mortgage rates, record high employment, the government’s Help to Buy scheme, and access to higher loan-to-value mortgages are key factors encouraging first-time home buyers. 

While the number of first time buyers is rising in the country overall, some regions – particularly those where home prices have increased at a faster pace – have reported a drop in their share in the market. London – the U.K.’s most expensive city – is one of these places. The number of first time buyers dropped by 26% from 57,900 in 2007 to an estimated 42,983 in 2017. They were required to put down a 27% deposit for buying homes in London on average last year, Halifax said. 

In Northern Ireland, the number of first-time buyers has risen by 65% since 2007. The southeast had the largest number, totaling more than 69,000 last year, up from 67,600 in 2007.

The building industry is responding to this demand. According to the National House-Building Council, builders registered plans to start 160,606 new homes, up 6% from 2016 and the highest number since the start of the financial crisis in 2007.