This article is an external press release originally published on the Landlord News website, which has now been migrated to the Just Landlords blog.
New research conducted by estate agents haart suggests that UK property prices rose again during the last month, to continue the upward spiral consistently seen over the rest of the year.
Growth
According to the report, British property prices were up 7.3% annually and by 0.9% on the previous month. This took the average home to a price of £219,315.
Moreover, the number of new buyers registering has risen by 1.7% in the last month and by 10% annually. However, supply of new homes continues to be the Achilles heel of the market, with numbers down by 3.6% monthly and by 14.7% on the same period last year. As a result, twelve buyers are competing for every property that comes onto the market, the highest ratio for 17 months.[1]
First-time buyer house prices are accelerating at a quicker pace than the rest of the market, up 9.9% annually and by 0.9% over the month. The average price of a starter home is now £169,259.[1]
The number of first-time buyers is up by 8.5% on last August and there has been a monthly rise of 1.2%. Of all mortgages written in August, 41.6% were written for first-time buyers. This was a drop from 45.9% at the same time last year, but a rise of 0.3% from July. Significantly, the average first-time buyer deposit rose by 7% n the last month to reach £34,472.[1]
Concern
Paul Smith, CEO of haart, said that, ‘it is concerning to see the growth in the price of starter homes outstripping the rest of the market as it means it is becoming increasingly difficult for first-time buyers to get on to the property ladder.’ Smith feels that the, ‘10% 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 hold on to their current property for its value to increase further.’[1]
First-time buyer prices rise again
‘However if the seller is upsizing, any increase in the value of their current home will be negated by the increase in the price they pay for their next, more expensive property. With good availability of fixed-term mortgages and a number of known unknowns in the near future such as interest rate rises our advice for on-the-fence sellers is to do so now while the conditions are favourable,’ Smith continued.[1]
Concluding, Mr Smith said that haart’s research, ‘shows first-time buyers must now find a 20% deposit of around £34, 000-30% greater than the average salary. These are likely funded by the Bank of mum and dad so their offspring can take advantage of current interest rates and mortgage availability. 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.’[1]
[1]http://www.propertyreporter.co.uk/property/ftb-house-prices-outpace-rest-of-market.html
