The firm analysed official data and found that average prices paid by first time buyers have risen by 58.9% in some parts of the UK since 2013 although one area has actually experienced a reduction in prices over the same period.
The largest increase of 58.9% occurred in Bristol where first time buyers have seen prices rise by more than any other part of the UK. Aberdeen was the only city where prices for first time buyers have fallen over the last five years where the cost is now 5.4% less than in 2013.
In country terms the greatest rise was in England where first time buyer average prices have risen by 40.6% followed by 26.4% in Wales and 22.0% in Scotland. The most expensive region is London where prices increased by 52.5% with the smallest rise in the North East of 13.1%.
David Alexander, joint managing director of Apropos by DJ Alexander Ltd, explained: “These figures highlight the enormous differences in average first-time buyer prices across the UK with some places such as Bristol, Manchester and London all increasing between 50-60% in a five-year period. This isn’t just an enormous percentage increase the actual prices paid are now substantially more for first time buyers reaching £257,493 in Bristol by the end of 2018.”
Four cities in the East and West Midlands have all seen large average price increases ranging from 41.8% in Birmingham, 43.9% in Leicester; 48.6% in Nottingham and 49.3% in Coventry. There are, therefore, many parts of the UK where prices continue to rise substantially, and first-time buyers are happy to pay the increased prices. The assumption that high price growth is a feature solely of London and the South East is clearly not true.”
David continued: “Indeed, in Scotland first time buyers in Edinburgh are paying 35.4% more now than five years ago while those in Glasgow have to pay 30.8% more. People from Dundee fair better with an 11.8% increase over five years.”
What this tells us is that demand remains strong among first time buyers even in the face of large increases in average prices. The spread of price increases across the country would indicate that confidence in property ownership remains high and many first-time buyers are committed to home ownership. Indeed, recent research by the Halifax found that first time buyers make up the majority of home purchases.”
David concluded: “So although there are headwinds in the economy from Brexit, wider economic uncertainty, and some loss of consumer confidence about the future the property market remains remarkably strong. I would expect this to continue and to have a knock-on effect on the rest of the market. Strong first-time buyer buying tends to impact up the property chain to increase demand and prices among home owners moving on. Therefore, these numbers, although rising at a substantial rate, seem to remain sustainable in the immediate future and that is welcome news.”
