It’s been a roller-coaster ride for some in the housing market in the post credit crunch years, but first-time buyers who bought at the right time, and in the right places, have made significant gains.

At a UK level, those who bought their first home between mid-2011 and mid-2012 have seen house price growth averaging £54,941. Having put down an initial deposit of £32,366, they now have a home worth £212,866 and own 41 per cent of that home.

As a result, in the space of five years, the 2012 cohort of 207,600 first-time buyers are sitting on a profit of £11.3 billion against an initial total deposit of £6.7 billion.

But gains are far from evenly spread. More than half of the accumulated equity – £5.7 billion – sits with 17 per cent of those buyers, the 35,100 who bought in London. By contrast, the 37 per cent who bought in Scotland, Wales, Northern Ireland and the North East together account for just £838 million (circa 7.4 per cent) of the total gains.

London buyers obviously had to find bigger deposits, at an average of £66,493, but they’ve averaged gains of £161,379. Every £1 they put down in deposit is now worth £2.43, a 243 per cent equity gain. The average first-time buyer in Scotland paid a much lower £23,641 deposit and gained just £6,039 through house price growth. Their £1 is now worth £1.26, a much more modest 26 per cent gain on their deposit.

Will history repeat itself for future first-time buyers? The last time first-time buyers made around £55,000 in the first five years of home ownership was late 2002. But significantly, the growth to the end of 2007 – the very beginning of the global financial crisis – was much more evenly spread, with London buyers taking just 18 per cent of the winnings.

Looking forward, London first-time buyers are unlikely to be so lucky. Not only do they have to find a much bigger deposit, at £106,054, they’re also unlikely to see such levels of house price growth.

And despite the profit they’ve made, many of London’s 2012 first-time buyers will still struggle to borrow enough to trade up the housing ladder in the capital. Instead, we expect many aspiring upsizers to take the equity earned in the London market out to the commuter zone, where their money will go further, as they look to make a move up the housing ladder.

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