The affordability difficulties confronting first-time buyers have significantly reduced the number of first-time buyers entering the market, said the Halifax bank in its First-time buyer annual review.

There were an estimated total of 361,000 first-time buyers in 2004, the lowest annual total since 1981. The number of first-time buyers last year was almost a third lower than in 2002 (532,000).

The average price paid by first-time buyers increased by 16 per cent in 2004 from £112,541 in 2003 to £131,024. First-time buyers in the North and Wales experienced the biggest price rises in 2004 with increases of 27% and 25% respectively.

Nine out of ten of the post towns surveyed were unaffordable for first-time buyers in 2004. There were some regional differences. In four regions – East Anglia, the South West, South East and the North – the survey found that 95 per cent or more towns were unaffordable for first-time buyers.

On the other hand, 19% of the towns surveyed in Scotland and 25% in Northern Ireland were affordable.

There has been a significant increase in the number of towns that are unaffordable for first-time buyers outside southern England since 2002. The proportion of towns in the North unaffordable for a typical first-time buyer has risen from 54% in 2002 to 95% in 2004. There have also been marked increases in Yorkshire and the Humber (72% to 92%), the North West (67% to 88%), Scotland (57% to 81%) and Wales (62% to 86%) over the past two years. The tables above show the least and most affordable towns in the UK.