New buyer levels down

The number of first time buyers (FTBs) entering the property market in 2007 fell to low[CUT?] levels not seen since 1980.

According to Halifax, just 300,000 FTBs bought a house in the year, signalling a 44 per cent decline on the figure recorded in 2002.

The average young buyer cannot afford to purchase a property in 96 per cent of UK towns, with Henley on Thames named as the least affordable area.

The most reasonably priced town is Bootle in Merseyside, followed by Gosport, Hampshire and Lerwick, Shetland Islands.

"Rising property values have priced many potential first-time buyers out of the housing market. When they do enter the market first-time buyers are now more likely to be in their thirties rather than their twenties and buy a flat rather than a terraced house," said Halifax chief economist Martin Ellis.

"First-time buyers are also buying proportionately more in cities than towns as they opt for convenience over size.

"Despite the increase in property prices in the past few years, the financial position of the majority of first-time buyers is sound and they, on average, put down a 20 per cent deposit, which is equivalent to more than a year's earnings," he continued.

FTBs were handed a break in December when the Bank of England cut the base rate of interest to 5.5 per cent.

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