First-time buyers are being pushed further out of the capital and other urban centres, Office for National Statistics analysis of FCA mortgage data suggests.
By examining data for the 10 years to 2023, the ONS found that several London boroughs were among the local authority areas with the steepest falls in first-time buyer numbers over the past decade.
The findings show similar trends can be seen in other major UK cities where first-time buyer mortgage numbers are either falling or growing more slowly than in surrounding areas.
Since 2021, first-time buyer mortgage numbers have been falling and in 2023, they dropped to a decade low of 282,000.
However, first-time buyer mortgages made up a greater proportion of total residential mortgage sales in 2023 at 38% than they did 10 years earlier when they accounted for 28% of the total number.
Overall, the South East saw a higher share of new first-time buyer mortgages than London in 2023, with the largest growth in the North East of England and Northern Ireland.
The FCA data show that the overall number of new first-time buyer mortgages in the UK has been falling since 2021, and in 2023 was the lowest since 2013 at 282,000.
However, sales of first-time buyer mortgages made up a greater proportion of total residential property sales in 2023 than they did 10 years before.
Many local authorities outside of London have seen a marked increase in sales of first-time buyer mortgages since 2013, while some boroughs of the capital have seen the steepest falls.
In 2023, the three areas with the highest rates of first-time buyer mortgages in the UK were Dartford in the South East, Harlow in the East of England, and Nuneaton and Bedworth in the West Midlands.
By comparison, the three areas with the highest rates of first-time buyer mortgage sales in 2013 were all in London – Lambeth, Tower Hamlets and Wandsworth.
Both Lambeth and Tower Hamlets also saw some of the largest falls in rates of first-time buyer mortgages between 2013 and 2023, of 34% and 41%, respectively.
Zoopla executive Richard Donnell says: “First-time buyers struggle where the cost of buying a home is the greatest, increasing the need for a larger deposit and a higher income to buy.
“The average household income of a first-time buyer in London is £100,000 and the average deposit required is £150,000.
“The trend in recent years has seen first-time buyers account for a larger share of sales as existing owners have tended to move less often and use permitted development rights to extend and add value to their homes, rather than pay stamp duty and moving costs.
“Higher house prices, higher mortgage rates and the impact of mortgage regulations have compounded the problems for those buying their first home in southern England.
“This has exacerbated pressures in the rental market pushing rents higher.
“There is a case to ease mortgage regulations and help more first-time buyers access housing and reduce the pressure on the rental market.”
Estate agency trade body Propertymark’s president Toby Leek says: “Many first-time buyers are being priced out of cities, especially throughout London where they have grown up or have a desire to nest themselves.
“This is spurring on aspiring buyers to relocate to more affordable areas of the country.
“To combat this, the UK Government and the devolved administrations need to implement support mechanisms to enable more people to buy their first home well into the future, as well as continue in their missions of building new homes for a growing population, as an undersupply of properties will push up house prices even further.”
