Latest figures from Nationwide’s House Price Index, published today (May 1), showed that house prices in April 2019 were 0.9 per cent higher year-on-year and 0.4 per cent up on the previous month.
This was the fifth month in a row in which annual house price growth was less than 1 per cent.
The index also showed the number of first-time buyers entering the market had grown steadily throughout recent quarters.
In fact, according to recent lending figures from UK Finance, the number of first-time buyers completing mortgages increased by 4.1 per cent since last year.
Commenting on the figures, Robert Gardner, Nationwide’s chief economist, said indicators of housing market activity — such as the number of property transactions and the number of mortgages approved for house purchase — had remained broadly stable in recent months.
He added: "First-time buyers have been supported by the strength of labour market conditions, with employment rising and earnings growth slowly gathering momentum.
"While house prices remain high relative to average earnings, low mortgage rates have helped to support mortgage affordability."
Mr Gardner said raising a deposit appeared to be the major barrier for prospective first-time buyers and said the cost of serving a typical mortgage remained in line with or below long-run averages as a share of take home pay in most regions.
Figures from the index showed that first-time buyer mortgage payments as a percentage of their take home pay were below the long run average in all regions except the outer south east, outer London areas, and the capital itself.
London was the worst area for first-time buyers as their mortgage payments accounted for more than half of their take home pay.
Andrew Montlake, director of the UK-wide mortgage broker, Coreco, said: "Sellers may look at these latest house price figures with a sense of dismay but for prospective buyers market conditions have rarely been as good.
"It’s a buyers’ market right now, with a cherry on top. First-time buyers are driving a significant chunk of the activity in the market at present, especially those given a helping hand by the bank of mum and dad, or gran and grandad.
"A combination of lower house prices, help-to-buy, fewer amateur landlords and more mortgage products at 90 per cent and 95 per cent loan to value has created the perfect environment for people putting that first foot on the ladder.
"There’s also the small fact that a lot of first-time buyers are now looking at the property market and see that it’s often cheaper to buy than rent.
"Affordability issues clearly remain more acute in the capital but even there people are increasingly surprised at the products available given the brutal level of competition in the mortgage market."
Gareth Lewis, commercial director of property lender MT Finance, said the good conditions for buyers were unlikely to change in the foreseeable future.
He added: "The fact that there is any growth in values at all in encouraging, given what is going on in the wider political arena and this level is more sustainable than the spikes we have seen previously, which have such an impact on affordability and people’s ability to buy.
"Subsequently, first-time buyer numbers continue to improve, which is hugely positive. The market needs first-time buyers so that second steppers can move up the ladder to bigger homes."
Jeremy Leaf, north London estate agent and a former RICS residential chairman, said although reduced competition from landlords was encouraging first-time buyers to look at the housing market as a cheaper alternative to renting, landlords leaving the sector meant the hardening of rents has made deposit saving more difficult for some people, particularly in London.
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: "While the housing market may be subdued, the lending side is incredibly competitive."
He added that as supply for mortgages was outstripping demand, mortgage rate increases were remaining subdued as lenders competed with each other to attract business.
imogen.tew@ft.com
