Buying your first home can be a life-changing experience

Homes bought by first-time buyers have reached their most affordable levels for seven years – but the number of people getting a first foot on the property ladder is at a record low, thanks to the size of deposits needed for purchases.

A review of the market by Halifax has found that homes are now “affordable” in about 45pc of local authority areas – the highest proportion for eight years. Halifax defines “affordable” homes as those costing less than four times average yearly earnings in the local area. Only 5pc of properties fell into this category at the peak of the housing boom in 2007.

However, Halifax added that this year had seen the fewest first-time buyers (about 187,000) since 1974. It said this was because the average deposit was now £27,032, as opposed to £17,482 four years ago.

The average deposit has risen from 10pc of a property’s price in 2007 to 20pc today. In other words, homes are now more affordable, but it is harder to raise the necessary finance.

“Housing affordability for those looking to get on to the property ladder for the first time has improved significantly over recent years, largely as a consequence of the decline in house prices since 2007,” said Halifax housing economist Martin Ellis.

“Nevertheless, conditions for potential first-time buyers remain tough. Difficulties raising the necessary deposit and concerns over the economic climate are preventing many from entering the market.”

According to the Halifax research, the most “affordable” places in the UK are South Ayrshire and Northumberland. The least “affordable” places are Brent (where the average property price for a first-time buyer is more than nine times the average annual local wage) and Oxford.