Investors have stepped back, mortgage rates are low – so where are all the first time buyers?

24 Aug 2017

If Halifax’s recent house-price findings are anything to go by, then it looks like first time buyers might have a chance of climbing on the property ladder.


According to The Halifax Price Index, which was published on 7th August (link to:, house prices in the last three months from May to July 2017 were 0.2% lower than in the previous three months. This is the fourth price fall in a row – the first of its kind since November 2012.


It is thought that a squeeze in spending power and slower wage growth has had an impact on property transactions, but also, competition in the market has lessened following the recent changes to Stamp Duty and Land Tax. Additionally, the tax surcharge applied to second properties has seemingly put a dampener on investors’ plans, but this would not affect first time buyers. They are also the ones benefitting from low rates of mortgage interest and other incentives to market such as Help to Buy.


If the general landscape for first time buyers is good, why are we not seeing record numbers? It could be that the ongoing shortage of properties for sale is taking its toll. Plus the sky-rocketing prices demand higher deposits from people who are experiencing low wage growth and rising living costs.


The average cost per square meter has increased 236% over the past 20 years, from £672 in 1997 to £2,260 in 2017. There is also a massive regional divide, as the costs in Greater London has increased 402% per meter squared, compared to 147% in Scotland (source as before). This equates to around three times local average gross earnings – compared to London, where it is around 12.6 (source:


First time buyers play a crucial role in the housing market and every transaction has an impact further up the chain. A slow-down in demand could also distort drive to build new houses. As inflation and wage growth slowly catch up, perhaps we will experience a small increase – only time will tell.


If you would like some advice relating to your property purchase, whether you are a first time buyer or not, contact Maureen or any member of the Real Estate team at DMH Stallard, who would be happy to help.


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