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Last Updated: Saturday, 22 December 2007, 11:29 GMT
First-time buyers 'at fresh low'
Prospective house buyers
House prices have soared 82% over the past five years
The number of first-time home buyers in the UK has dropped to its lowest point since 1980 as house prices soar, mortgage lender Halifax says.

An estimated 300,000 first-time buyers entered the market in 2007, 15,000 fewer than a year earlier.

The average house was out of the reach of a typical first-time buyer in 96% of UK towns, Halifax found.

The average price paid by a first-time buyer for a property increased by 15% during this year to 175,093.

Priced out

The price has soared 82% over the past five years, it added.

Henley-on-Thames, Oxon
Ilkley, W Yorks
Sevenoaks, Kent
Ascot, Berkshire
Amersham, Bucks
Hook, Hampshire
Winchester, Hampshire
Wetherby, W Yorks
Pulborough, W. Sussex
Truro, Cornwall
Source: Halifax

"Rising property values have priced many potential first-time buyers out of the housing market," Martin Ellis, chief economist at Halifax.

"When they do enter the market, first-time buyers are now more likely to be in their 30s rather than their 20s and buy a flat rather than a terraced house."

Henley-on-Thames was the UK's least affordable town, with an average property price of 642,672 - more than 13 times the average income of first-time buyer households in the area.

Bootle, Merseyside
Gosport, Hampshire
Lerwick, Shetland
Nelson, Lancashire
South Ockendon, Essex
Clacton-on-Sea, Essex
Newham, London
Cumnock, Ayrshire
St Leonards, E Sussex
Ashington, Northumberland
Source: Halifax

Ilkley in West Yorkshire was the second least affordable town with average home values almost 12 times that of the average local first-time buyer household income.

Seven out of 10 of the least affordable towns are in the South East.

Bootle in Merseyside was the most affordable location with average price of 112,689 - just over three times the average household income for a local first-time buyer household.

A house was classified as unaffordable if the average price was above four times the total income of the first-time buyer household.

Conditions to improve

Halifax's report found that flats, along with terraces, are now the most common property for first-timers, with 37% of buyers purchasing a flat.

Houses are massively overpriced, a return to sanity is inevitable
Benjamin Mann, Weymouth

The average first-time buyers in eight out of 12 UK regions paid stamp duty in 2007, Halifax added.

Stamp duty is currently paid on houses worth more than 125,000. The threshold was raised from 60,000 in 2005.

Halifax's report comes amid a slowdown in the property market.

The lender reported a third consecutive monthly fall in house prices in November.

The Royal Institution of Chartered Surveyors (RICS) said conditions for first-time buyers should begin to improve in the coming year.

"There is huge pent-up demand from first-time buyers, and should house prices drop in the early part of the year, many will be ready to pounce, especially if more repossessions filter through into the market," said RICS chief economist, Simon Rubinsohn.

How one first-time buyer got onto the housing ladder

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