The UK average property price is now £216,951 – up 6.1% annually and 2.6% on the month, reaching a new high based on haart’s data. This growth is a continuation of the steady upward trajectory that has been seen since November 2014. The average price of first-time buyer homes has seen an even sharper annual increase of 7.5%. The price of starter homes is up 2.6% on the month, the same as the national average and now sits at £166,393.
The number of first-time buyers is down 13.6% on the year. First-time buyers made up 42.7% of all mortgages written in June, down from 44.4% a year earlier. This suggests first time-buyers are finding it difficult to get a foothold in the market – the average first-time buyer mortgage is up 3.0% on the month and 8.7% on the year to reach £133,875.
Although the number of new buyers registering has only increased marginally on the month in June (by 0.5% since May), supply is still unable to keep up, down 0.7% over the same time period and 13.9% annually.
There are now 11 buyers chasing each property for sale across the UK, up 10% annually and 1.3% on a monthly basis.
Paul Smith, CEO of haart comments: “First-time buyer house prices climbed £4,150 in a single month or £138 every day in June. A potential first-time buyer on an average salary of £27,000 must be prepared to spend 42% of their take home salary on mortgage repayments, showing the traditional rule of spending no more than 30% of income on housing is no longer reality for many.
As a result, we’ve seen a knock-on effect on first-time buyer registrations which are down 13.6% annually. The only solution to this is to unlock the market and free up supply.
Efficient use of space is a must and we need to dispel fears that downsizing indicates older home owners have lost their zest for life. Movement in the upper echelons of the market will free up stock at all levels and put the brakes slightly on property price growth.
There are currently 11 buyers chasing every new property to come onto the market in the UK, and in London the figure is nearly double at 20:1. However, the Government’s recent announcement in the emergency Budget that the inheritance tax threshold is to be raised to £1million and that an ‘inheritance tax credit’ will be implemented, should encourage those with larger, more expensive homes to downsize. This should have a trickle-down effect and boost the supply of starter homes at the lower end of the market, helping first-time buyers.”
