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FTB numbers slump to lowest level in 23 years

The number of first-time buyers entering the property market is at its lowest level since 1981, according to The First Time Buyer Annual Review by the Halifax.

Halifax says there were 361,000 FTBs last year compared with 368,220 in 2003 and 532,000 in 2002. The Halifax total for 2004 lower than the statistics from the Council of Mortgage Lenders which show a slight rise to 369,000.

The average FTB pays over 1,300 in stamp duty, equiv-alent to 5 per cent of their deposit or nearly two-and-a-half weeks of their gross ann-ual income, says Halifax. It is campaigning for a reform of stamp duty on residential property.

The average house price paid by FTBs increased by 16 per cent to 131,024 last year from 112,541 in 2003.

The affordability difficulties are compounded by the fact that nine out of 10 UK towns are deemed unaffordable for FTBs, meaning that 548 out of 597 towns are beyond an FTB’s borrowing capacity based on average income.

The average FTB deposit nationally was 26,455 in 2004, 20 per cent of the property’s value compared with 18 per cent or 19,999 in 2003.

The report says the inc-rease in the average age of FTBs in recent years is attributable to the rise in house prices. Younger potential buyers also seem to be spending longer in higher education and entering the labour market later.

Chief economist Martin Ellis says: “Affordability has become a serious issue, making it very difficult for those looking to get on to the housing ladder for the first time. This is highlighted by the sharp decline in the number of first-time buyers over the past two years.”

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