Halifax’s first-time buyer review showed that the average house price paid by a first-time buyer in June 2011 was affordable for someone on average earnings in 48% of all local authority districts (LADs).

This is the highest proportion of housing affordable for first-time buyers in eight years and compares with 40% in 2010 and just 6% in 2007.

Some 80% of all LADs in the North of the UK are affordable for first-time buyers – 10 times the proportion of affordable areas in the South, where just 8% of property is affordable.

The North East is the only UK region where all LADs are affordable for first-time buyers.

In contrast, London is the only region with no affordable areas for first-time buyers on average earnings.

Sponsored

Episode 2: Affordability : Powered by Partnership podcast from Newcastle for Intermediaries

Sponsored by Newcastle for Intermediaries

Halifax said the figures showed a stark divide between the north and south of the UK.

Suren Thiru, housing economist at Halifax, said: “It’s encouraging that housing affordability for first-time buyers in general has improved significantly over recent years, as a consequence of the marked falls in both house prices and interest rates since 2007.

“However, there is a distinct north-south divide within this improvement as the majority of affordable areas are in the north.”

Despite the improvement in affordability, the number of first-time buyers entering the market remained constrained over the past year.

Halifax estimates that there were around 86,000 first-time buyers in H1 – a fall of 10% from the same period in 2010 and close to half the number in the first six months of 2007 where the figure stood at 181,500.

First-time buyers put down an average deposit of £27,719 in H1, equivalent to 21% of the property price.

The figures also showed that the average house price has fallen by 4.1% over the past year from £140,883 to £135,091.