Last updated on August 18th, 2015 at 01:53 pm

(LADs are deemed affordable if the average first time buyer house price is lower than 4 times the gross average earnings for that LAD.  E.g. average earnings £30,000 = affordability being less than £120,000.)

According to the Halifax, this affordability has helped the number of first time buyers to increase by 34% in the first half of 2012, compared with same period in 2011, to 114,000.  However the number of first time buyers was at an historically low level last year at less than half of the 244,700 ten years ago.

It should also be noted that the number of first time buyers in the first half of 2012 is also likely to have risen due to the fact that the stamp duty holiday came to an end in March 2012.

The news is better for buyers in the north than those in the south as the report shows that in June 2012 91% of affordable LADs were in the north (97% in the north east) and only 9% in the south (0% in London!) – a deterioration of the situation for those in the south since 2002 when the figure was 15%.

Martin Ellis, housing economist at the Halifax described the increase as “encouraging” but added that the economic outlook and difficulties in raising deposits remained “significant hurdles” for first time buyers.

In fact, whilst the New Buy Scheme is not likely to be have significantly affected the figures yet, deposits reduced in the first half of 2012 over the same period in 2011 by only 1% to £27,857, but these are still 59% higher than £17,523 in 2002.  Unfortunately for first time buyers in the south, deposits are still around £34,843 in the south east and £59,221 in London.

Whilst the Halifax’s report should be welcomed by first time buyers in general, and the introduction of the New Buy Scheme should also help, it is a shame that these incentives are also tempered by the loss of the stamp duty holiday, which has resulted in 44% of first time buyers paying stamp duty now compared to only 5% during the holiday.

For further information on any issues relating to first time purchases, please read our web pages