Mortgages  

House price growth pricing out first-time-buyers: Haart

House price growth pricing out first-time-buyers: Haart

First-time buyer house price growth outstripped the rest of the market in August, according to estate agent Haart, up 9.9 per cent annually to average £169,259.

This compares to UK-wide property prices rising 7.3 per cent annually and 0.9 per cent last month to £219,315.

First-time buyer deposits were up 7 per cent in just one month to average £34,472 - or 20 per cent of average purchase price.

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The number of new buyers registering has risen 1.7 per cent in the last month and 10 per cent annually as the summer market draws to a close and buyers return from holiday.

Meanwhile, the supply of properties has contracted, with the number of new homes for sale falling 3.6 per cent on the month and down 14.7 per cent on last year.

This resulted in over twelve buyers chasing every property to come onto the market, the highest ratio in 17 months.

Paul Smith, chief executive of Haart, said it is concerning to see the growth in the price of starter homes outstripping the rest of the market, making increasingly difficult for first-time buyers to get on to the property ladder.

“The 10 per cent annual increase in first-time buyer house prices comes as a result of a shortage of homes, due to lack of building, but also the absence of fluidity in the upper echelons of the market, as people who might otherwise be moving to their second or third home hold on to their current property for its value to increase further.

He suggested that with good availability of fixed-term mortgages and a number of ‘known unknowns’ in the near future, such as interest rate rises, on-the-fence sellers should do so now while conditions are favourable.

“We need all levels of the market to take advantage of current positive market conditions to ensure there is movement and appropriate homes are available to the various demographics looking to buy or move up the property ladder.”

The latest figures from the Bank of England and Financial Conduct Authority revealed that the value of residential loans advanced to first-time buyers increased over the second quarter of this year to £10.8bn from £8.9bn.

At the end of August, monthly first-time buyer sales hit a post-recession record, according to Your Move and Reeds Rains, with July seeing 29,700 first-time buyers complete property transactions, the highest since August 2007, when it stood at 35,300.

peter.walker@ft.com