The number of new buyers registering has risen 1.7% in the last month and 10% 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 down 3.6% on the month and down 14.7% on last year. This has resulted in over twelve buyers chasing every property to come onto the market, the highest ratio in 17 months.
First-time buyer house prices are rising at a faster pace than the rest of the market, up 9.9% annually with a monthly increase of 0.9%. The average price of a starter home now sits at £169,259.
The number of new first-time buyers is up 8.5% on last August while there has been a 1.2% rise in registrations month on month. First-time buyers made up 41.6% of all mortgages written in August, down from 45.9% a year earlier but up 0.3% on the previous month. The average first-time buyer deposit has risen significantly in the last month, up 7.0% to reach £34,472.
|
National |
August 2015 |
% change since July 2015 |
% change since August 2014 |
|
Ave UK house prices £ (SSTC) |
219,315 |
+0.9 |
+7.3 |
|
Ave FTB house prices £ (SSTC) |
169,259 |
+0.9 |
+9.9 |
|
London house prices £ (SSTC) |
507,674 |
-0.1 |
-3.2 |
|
House sales (exchange) |
59,096 |
3.0 |
-11.4 |
|
Ratio of new buyer demand to property supply |
12.4:1 |
+5.7 |
+29.0 |
Paul Smith, CEO of haart, comments: “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. 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 home hold on to their current property for its value to increase further.
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.
Our 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.”
