• First Time Buyer (FTB) house prices across Britain rose by 24 per cent between 2016 and 2021 – faster than the overall housing market
• The average FTB is now paying £223,751 for their first property
• FTB property is now worth nearly seven times a thirtysomething’s salary
• The North West has seen the greatest percentage increase in FTB prices, rising by 35 per cent (£43,812) over the past five years
• London is the most expensive FTB market, with average prices reaching £440,590 last year

While celebrities can often be seen splashing millions of pounds on their first homes, with a whopping £4 million¹ spent by Molly-Mae Hague on her Cheshire pad, the average First Time Buyer (FTB) is spending £223,751 on their first property reveals new analysis² from Direct Line Home Insurance.

The average FTB needs to find £43,623 more than they did in 2016, a 24 per cent increase, to secure their first property. Over the same period, the average salary of a thirtysomething, the decade that most people buy their first property³, has risen by just 10 per cent³, leaving them with a huge deficit. A typical FTB property is now worth roughly seven times a 30–39-year old’s annual salary⁴, a rise from 2016 when it was six times, making the first rung on the property ladder increasingly hard to reach.

Direct Line’s analysis suggests that FTB prices are being impacted by the movements of those in their 30s across the country. The average FTB property price, in the ten local authorities that saw the greatest increase in residents aged 30-39 between 2016 and 2021, rose by 24 per cent⁵.  In the 10 authorities with the greatest decrease in number of 30–39-year-old residents, there was a two per cent decrease in FTB prices.

Areas with an above-average increase in residents of those in their 30s, saw FTB prices rise by 22 per cent over the past five years, compared to just 10 per cent in areas with a below-average increase of residents in this age group.

Looking more deeply into local FTB hotspots, the areas with the fastest growing prices in Britain are Burnley in Lancashire (up 45 per cent over the past five years), the Orkney Islands on the north coast of Scotland (44 per cent), Rossendale, Lancashire (42 per cent), Bury (40 per cent) and Rutland, East Midlands (40 per cent). These five councils averaged a house value of £119,735 in 2016 and this rose by £50,158 to £169,893 in 2021, an increase of 42 per cent. These five areas also saw a nine per cent increase in residents aged 30–39-year-old over the same timeframe, compared to a national average increase of just five per cent.

Table one: Changes in first time buyer house prices across the UK, 2016-2021

Source: Direct Line Home Insurance, 2022

Dan Simson, Head of Direct Line Home Insurance, said “The rate at which FTB prices have been increasing is frankly frightening. However, this generation of property owners are facing the challenge of dramatically increasing property prices in traditionally popular areas such as London and instead are buying in places that are less well-known. We may see an even more dramatic emergence of these “young towns & cities” with the increasing prevalence of remote working that enables people to be far more flexible as to where they live.  Given the commitment people need to make to get on the property ladder, it is vital they protect their investment with insurance should the worst happen.”

Regional findings

Unsurprisingly, London is the most expensive FTB market, with average prices reaching £440,590 last year. However, it is also the region with the most stagnant FTB market, rising by just seven per cent (£30,323) over the past five years. The five London boroughs that saw the sharpest increase in FTB prices (Barking and Dagenham, Hackney, Waltham Forest, Redbridge and Havering) also saw a rise in 30–39-year-old residents. These boroughs saw a FTB price increase of £55,112, or 16 per cent over the past five years. Over the same time the number of young people living in these areas grew by four per cent.

Across London, the population of 30–39-year-olds fell by one per cent as young people looked outside of the capital for their first home – potentially due to their change in working patterns since the Pandemic hit. Similarly, the areas with the highest FTB prices (Kensington and Chelsea, Westminster, the City, Camden and Hammersmith) – averaging house prices of £782,773 saw a five per cent decrease in 39-39 year old residents over the past five years.

ENDS

Notes to Editors

¹          https://www.ohmymag.co.uk/celeb/molly-mae-hague-this-is-how-much-her-dream-home-has-cost-her_art11223.html

²          ONS First Time Buyer price data 2021, 2020, 2016

³          Halifax First-Time Buyer Review 2021, published 22^nd January 2022

⁴          Analysis of Annual Survey of Hours and Earnings data (Table 6.7a, Annual pay - Gross (£) - For all employee jobs: United Kingdom). Mean salary for 30-39 year olds compared in 2016 and 2021

⁵          Mid-Year Population Estimates, UK, 2020, 2016

For further information please contact:

Chelsey Wheeler
Deputy Head of News and Issues – Direct Line  

Tel: 01651 832 095

Email: [email protected]

Direct Line

Started in 1985, Direct Line became the first UK insurance company to use the telephone as its main channel of communication. It provides motor, home, travel and pet insurance cover direct to customers by phone or on-line.

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