Higher mortgage rates have led to a slump in the number of first-time buyers, according to lender Halifax, as falling property prices and higher wages fail to appeal.
There was a 22% drop in the number of first-time buyers to 186,015 between January and August, the bank said, as high interest rates on mortgages weighed in.
This was in spite of houses being at their most affordable for first-time buyers since 2020, with the income ratio for the group falling to 5.1 from 5.8 last year.
“Getting the keys to your first home is a significant milestone in anyone’s life,” Halifax mortgage director Kim Kinnaird commented.
“Growth in house prices over the past decade means raising a suitable deposit remains a significant hurdle.
“Coupled with the sharp rise in interest rates more recently [...] there is lots to consider for any first-time buyer.”
First-time buyers did indeed make up more than half of those taking out loans over the first eight months of the year, with a wider slowdown in the market seeing the figure largely unchanged from 2022.
The average age of those purchasing a property for the first time has now hit 32 meanwhile, having climbed by two years over the past decade.
“The expected further fall in house prices this year - alongside stronger income growth - may somewhat offset higher interest rates, which will be welcome news to many,” Kinnaird added.
However, interest is tipped to stay high into the coming year after the Bank of England held the base rate earlier this month in its bid to stem inflation.