As a result, of the 35 main Welsh post towns 25 (71%) were unaffordable. (See the technical note in Notes to Editors for the affordability calculation).
The key findings of the Halifax Welsh Annual First Time Buyer Review are:
* Only ten towns in Wales are affordable for FTB's compared to 17 in 2002. The affordable towns are Aberdare, Caernarfon, Ebbw-Vale, Holyhead, Llanelli, Merthyr-Tydfil, Neath, Pontypool, Porth and Port-Talbot.
* Welsh FTBs paid 32 per cent more for their first home in 2003 as FTB house prices rose from £60,887 to £80,059 in just one year. Wales experienced the second largest regional rise in FTB prices, just behind the North (35%).
* Affordability constraints on Welsh FTBs have contributed to a record drop in the number of FTBs entering the market during 2003. In fact the number of FTBs dropped by 43% from 28,000 to 16,000. In 2003 across the UK 359,000 first-time buyers entered the housing market, a reduction of 32% on 2002 when 527,000 people bought their first home.
* The average Welsh FTB paid stamp duty for the second year running in 2003. The average Welsh FTB now pays more than £800 in stamp duty, equivalent to around 7% of their deposit or around two weeks of their annual income. More and more FTBs are falling into the stamp duty net because the government has declined to index link the £60,000 threshold which has remained unchanged since 1993.
* The average age of a FTB in Wales is now 36 years (2002: 33 years). This makes the country, along with Scotland, home to the oldest FTB's in the UK. The proportion of those aged 25 and under buying their first home fell by 1% in Wales last year to just 16 per cent of all home purchases.
* The average deposit made by a Welsh FTB increased from 14 % to 14.6% of the value of the property during 2003. FTB's in Wales increased the amount of deposit they are paying on average from £8,562 to £11,742 during 2003 but in overall terms still lagged behind the rest of the UK where the average deposit is almost 20% of the property value.
* Terraced housing remains the most popular choice for Welsh FTB's with more than half choosing a terrace for their first home. Semi-detached properties are the second choice for Welsh FTB's with bungalows being the least popular first property.
Shane O'Riordain, General Manager, Group Economics, commented:
"FTB's in Wales faced the second largest increase in house prices across the UK during 2003 and are finding it increasingly difficult to get on the property ladder.
"First time buyers will find the going tough again this year as house price growth continues, especially outside London. At the same time, policymakers need to be mindful of the stamp duty burden on FTBs and should recognise the need to index link the £60,000 threshold as soon as possible."
