At £27,857 it is 59% more than was needed a decade ago with those living in London needing to the largest deposit at £59,221 while buyers in Northern Ireland need to put down the smallest deposit at £16,267.
The research from leading UK lender The Halifax, also shows that over a third more first time buyers now pay stamp duty as a result of the ending of the temporary increase in the stamp duty threshold for properties worth £125,000 to £250,000 in March. In total, 44% of first time buyers will now pay stamp duty compared to only 5% during the period of the temporary threshold increase.
It also found that the proportion of UK towns and cities that are affordable for first time buyers has risen to its highest level for a decade. The average house price paid by a first time buyer in June 2012 was affordable for someone on average earnings in 54% of all local authority districts (LADs), the highest proportion for ten years. This is up from 40% a year ago and almost eight times the proportion of affordable LADs at the peak of the housing market in 2007 when only 7% of LADs were affordable. The number of first time buyers has risen over the past year, albeit from a historically low level, helped by the improvement in affordability. Halifax estimates that there were approximately 114,000 first time buyers in the first half of 2012, up by 34% from the same period in 2011 when it was 85,600, but less than half the number a decade ago when there were 244,700. It says that the recent ending of the stamp duty holiday is likely to have boosted the number of first time buyers in the first six months of 2012 as some buyers brought forward their purchases to meet the March deadline.
'With first time buyers forming a vital part of the housing market, it is clearly encouraging that the number of those getting onto the property ladder for the first time may well increase this year, albeit from a historically low level. This partly reflects the substantial improvement in home affordability for first time buyers since 2007, following the fall in house prices over the period,' said Martin Ellis, housing economist at the Halifax.
'However, the continued uncertainty over the outlook for the UK economy and the difficulties faced by many in raising the necessary deposit remain significant hurdles for those wishing to buy their first home,' he added.
The research also shows that the north/south divide in first time buyer affordability has increased over the past decade. In June 2012, just 9% of all LADs that are affordable for first time buyers were in the south and 01% in the north. In 2002, 15% of all UK LADs that were affordable for first time buyers were in the south compared to 85% in the north.The North East is the only UK region where all LADs are affordable for first time buyers.
The North West has the second highest proportion of LADs at 97%, followed by Scotland with 93%. In contrast, London is the only region with no affordable areas for first time buyers on average earnings.
courtesy:- property wire.