The number of first-time buyers dropped marginally in 2015 to 310,000 from 311,700 in 2014, according to the annual Halifax review.
This represents the first annual decline in the number of first-time buyers since 2011, with the number growing by 60 per cent since then, from 193,700 to 310,000.
The marginal decline in first-time buyers is in line with general residential house purchases, and is partly due to lack of supply, according to the lender.
The average price paid by first-time buyers increased by 10 per cent last year - from £172,5632 to £190,180 - taking the price to more than the previous peak in 2007 (£174,994) for the first time.
Average deposits paid by a first-time buyer were 13 per cent more than a year ago, coming in at £32,927 in 2015, compared with £29,094 in 2014 and 88 per cent more than the average deposit in 2007 (£17,499).
Unsurprisingly, the average first-time buyer deposit is greatest in Greater London, at £91,409 – five-and-half times more than the £16,578 average for Northern Ireland.
Halifax also found while a mortgage term of 25 years has been the norm for some time, many first-time buyers are increasingly taking out mortgages where payments are spread over a longer period.
In 2007 the proportion of first-time buyers taking up a 35-year mortgage stood at 16 per cent, but by 2015 this figure had grown to more than one-in-four.
Over the same period, the share of mortgages with a 20 to 25-year term dropped from 48 to 30 per cent.
Improved mortgage affordability conditions since 2007 have been a key driver.
Despite higher house prices, the proportion of disposable earnings devoted to mortgage payments by a first-time buyer stood at just under a third in the third quarter of 2015.
This is a substantial improvement compared with the summer of 2007, when this figure reached a peak of half of disposable earnings.
Record low mortgage rates, coupled with earnings growth, are the key drivers behind this improvement, according to Halifax.
The bank’s mortgages director Craig McKinlay said although the average price of the typical first-time buyer home has grown by 10 per cent in the last year, the number of buyers taking that first step onto the housing ladder has been supported by favourable economic conditions.
“While affordability has improved since 2007, in many parts of the country the ratio of the average house price to earnings is still significantly above the long-term average of four times. This is a concern as it could prevent many potential buyers from entering the market.”
peter.walker@ft.com
