The Inside Edge
Whilst a North-South divide may still remain, the number of towns in the UK where first time buyers are able to afford to purchase a home is at its highest in eight years.
The review, released by Halifax, has shown that the average house price paid by a first time buyer, in June 2011, was affordable for somebody on an average wage in over 48% of all local authority districts (LADs).
This sees 2011 as showing the highest proportion of affordable properties for first time buyers in 8 years and has risen from 40% in 2010 and only 6% in 2007!
Of all LADs in the North of the country, around 80% are affordable for first time buyers. This is 10 times the proportion of affordable LADs in the South of the UK. In the South, only 8% of property is affordable.
The North East is the only region in the UK where every LAD offers affordable properties for first time buyers. London is the only region in the UK where there are no affordable areas for first time buyers on an average salary. The report by Halifax really does show a clear and quite gloomy divide between the North and South of the UK.
Suren Thiru, Housing Economist at Halifax, said “It’s encouraging that housing affordability for first-time buyers in general has improved significantly over recent years, as a consequence of the marked falls in both house prices and interest rates since 2007.
“However, there is a distinct north-south divide within this improvement as the majority of affordable areas are in the north.”
Whist there may have been some improvements in affordability, there have been less first time buyers entering the market.
Halifax estimates there were approximately 86,000 first time buyers in H1 – this showed a drop of 10% compared to the same period in 2010. In 2007, the figure stood at 181,500.