Asking prices down but 1st time buyers paying more

The price of typical first-time buyer homes coming to market has increased at double the national average over the past year, according to Rightmove data.

The portal’s latest House Price Index showed that the average asking price of property coming to market has fallen by 1.1% to £305,670 overall this month but the typical first-time buyer home of two bedrooms or fewer was the only category where the asking price has increased, by 1.3% month-on-month.

This now puts their annual rate of increase up nearly £15,000 (8.2%) at £192,147, almost double the average yearly percentage growth rate of 4.5% overall.

This chimes with separate research from Rightmove showing that those living with parents and the age group from 21 to 24 ranked highest in negative sentiment, in stating it is a ‘bad time to buy’.

However, properties at the higher end of the ladder also seem to be having some issues, with new asking prices dropping 3.1% on a monthly basis to £533,818.

The average time to sell increased by one day to 65 but is still one day quicker than this time last year.

Miles Shipside, housing market analyst for Rightmove, said: “Building 2m extra homes in the short term is not going to happen, so the immediate goal must be to meet the current 230,000 annual target for house building and to include more affordable options.

“This needs a co-ordinated approach to create an army of appropriately skilled workers, to include small and medium size developers, and to massively increase capacity and output.

“This has to be facilitated by more innovation, creative funding and overcoming some vested interests. Local authorities or housing associations have a major role for both social rented housing and the ownership ladder, perhaps allowing renters to build an equity stake that leads to gradually increasing shared ownership.”

Meanwhile, when it comes to actual sold prices, the latest Your Move House Price Index shows values rose by 0.4% in October to £294,351 – the highest monthly rate since the first quarter of 2016.

Annual growth slowed to 3%, down from 3.7% in September.

Adrian Gill, director of Your Move and Reeds Rains estate agents, said: “There’s been a general cooling in transaction numbers and buyer appetite in the housing market, which means we’re still seeing huge differences in the price growth across different regions.

“What hasn’t changed is an underlying picture of strong demand and inadequate supply. More and more young adults are living with their parents, but there’s no sign they are less ambitious to get their own place.

“As the Government looks again at housing, it will be a tall order to come up with something that meets the needs of people right across the country.”

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Written by: Houseladder