Research from Halifax has said that the average house price paid by a first time buyer (FTB) pushed through the 150,000 pound barrier for the first time in 2006.

In fact, the average price paid by FTB’s increased by 11% in 2006 to 151,565 pounds from 137,122 pounds in 2005.

2006 was a year of records concerning first time buyers, Halifax noted that the average FTB house price in each region of the UK was more than £100,000 for the first time.

The average FTB property price was lowest in Scotland (£108,922) and the North (£109,243) with both these regions seeing a rise in the average FTB price above £100,000 during the year. Five years ago, in all regions of the UK, bar London and the South East, the average FTB paid less than £100,000.

Stamp Duty becoming part of the process
First time buyers in the capital paid an average of £250,819 for the first time in 2006 - a figure which is above the 3% stamp duty threshold. Consequently, first time buyers in London face a stamp duty bill of at least £7,50.

Elsewhere in the UK, the average FTB faces a stamp duty bill of around £1,500.

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Main Points
- There were an estimated 315,000 first-time buyers in 2006, the lowest annual total since 1980.
- The average price paid by FTBs increased by 11% in 2006 from £137,122 to £151,565.
- Over the past five years the average house price paid by an FTB has increased by 95%.
- In 2006 the average FTB in each region of the UK paid more than £100,000 to purchase their first house.
- The average FTB in London paid more than £250,000 for the first time in 2006.

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Not as many first time buyers
The number of first time buyers is estimated to have fallen by 7% in 2006 from 340,000 in 2005 to 315,000, the lowest annual total since 1980. The annual number of first time buyers has fallen by 37% since 1997 when there were 503,000 FTBs.But what are first time buyers paying? During 2006, Halifax said that FTB mortgages made up 32% of all mortgages in the UK. The size of the average deposit has more than doubled over the past five years, rising by 112% from £13,249 in 2001 to £28,130 in 2006. Despite this, Halifax calculates that a typical FTB was unable to purchase the average house in 93% of towns in 2006. The average mortgage size for a new FTB in 2006 was £123,435, up 9% on 2005 and 91% higher than in 2001.

So where and where not to buy?
Gerrards Cross and Sevenoaks are the UK’s least affordable towns for first time buyers, while Nelson in Lancashire is the most affordable town.

And what’s being bought?
Halifax said that almost three quarters of properties purchased by first time buyers in 2006 were terraces (39%) and flats & maisonettes (34%). Detached properties accounted for only 5% of all purchases.

First time buyers are most likely to buy a flat in London (68%) and Scotland (63%). The smallest percentage of sales of flats and maisonettes to FTBs were in the East Midlands (10%) and Yorkshire and the Humber (11%). Flat purchases have risen the most in Scotland (14 percentage points) and the North (11 percentage points) over the past five years.

Tim Crawford, Group Economist at Halifax, commented: “First time buyers continue to struggle to climb onto the property ladder with the average house price paid by a new buyer entering the market now above £150,000.

This is close to double the level of five years ago. First time buyer affordability is now an issue across the UK with the average house price paid by a first time buyer more than £100,000 in each region of the UK for the first time in 2006.”