The Halifax predicts that the first-time buyer problem will extend into all regions of the UK by the end of 2004.

The lack of quality housing stock in the UK – particularly in London and the South East - is contributing to the upward pressure on house prices and this has routinely affected first-time buyers (FTBs) in these areas, the company reports.

The number of FTBs entering the housing market is at its lowest level since records began in 1974. 526,300 buyers entered the market for the first time in 2002, compared with just 330,540 during the first eleven months of 2003 (Source CML). According to the latest CML figures, in November 2003, first time buyers accounted for just 26% of all house purchase loans.

Traditionally the problems FTBs have experienced trying to get onto the housing ladder have been confined to London and the South East. As house prices outside these two regions continue to rise significantly, the first time buyer problem will extend into all regions of the UK by the end of 2004.

The UK average house price to earnings ratio for FTBs during 2003 was 4.27, compared to 2.46 in 1993. The highest ratios are currently seen in Greater London (5.90), the South East (5.15) and the South West (4.96).

The lowest ratios are seen in Scotland (2.92), the North (2.99) and Yorkshire and the Humber (3.13). The average first time buyer in the UK is spending just 15.9% of average gross earnings on mortgage payments, compared with 18% in 1993 and 22.8% in 1998.

The average FTB now puts down a deposit of around £20,000 compared to approximately £5,400 ten years ago – just under a fourfold increase. As expected, there is a large regional difference in the average deposit made by a typical FTB. In London the average deposit is currently £39,148 compared to the average deposit for a FTB in the North of £10,501.