First time buyers' monthly mortgage payments are up 20 per cent on average, as Rightmove says buyers may lock in longer mortgage terms to bring more certainty to their outgoings.
The latest house price index from Rightmove showed average monthly mortgage payments for first time buyers are up £163 from the beginning of the year as buyers face rising interest rates and record prices.
As a result, Rightmove said more buyers may lock in longer mortgage terms to bring certainty to their outgoings, especially as lenders are now offering “virtually the same” rate for either two-year and five-year fixed mortgages.
The figures released this week (August 15) showed the price of property coming to market has hit a sixth consecutive record of £369,968, up 0.4 per cent in July from the previous month (an increase of £1,354). These figures are in line with Nationwide’s house price index for July, released earlier this month.
The property portal said there are signs of the "seriously depleted stock situation" improving, with the number of sellers up by 13 per cent compared with this time last year. However the number of available homes for sale is still down 40 per cent on where it was in 2019.
“This significant shortfall from more normal stock levels will help to underpin prices this year, as there are simply not enough homes coming to market to correct the balance between supply and demand,” Rightmove said.
As a result of this, the property portal has revised its house price forecast for the year up from 5 per cent growth to 7 per cent.
Rightmove’s director of property science, Tim Bannister said given the current fast-changing economic climate, those looking to buy may choose to act now rather than wait.
“Having more new sellers this month is a win-win for the market, as these sellers will likely achieve good prices for their homes given the sixth asking price record in a row that we’ve now seen, which may help to explain the increase in new stock coming to market over the last year.
“For those looking to buy, it means more choice, and a slight easing in competition against other buyers while the market is still moving very quickly,” he said.
“While more choice is welcome news, the number of homes available remains well below the more normal levels of 2019 and is unable to satisfy the continued high demand that we’re seeing. Although a softening in demand is moving the market from a boil to a simmer, it remains 26 per cent up on 2019,” Bannister added.
The pandemic impact
The impact of the pandemic is also still visible in the market with homes in more rural areas still seeing high levels of activity.
In York, annual price growth was at 11.6 per cent.
York-based Hudson Moody’s managing director, Ben Hudson said the work from home shift since the pandemic has meant a steady flow of buyers from London have relocated to York due to its connectivity.
