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.”
Apologies to those who read this suggestion on Friday, but it was posted so late, I thought it was worth sticking it up again this morning in response to the comment; ‘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’,
I know it’s controversial, but it’s based on the fact that if we drive hundreds of thousands each year of what would have been First Time Buyers in the past into permanently renting (because they can never save enough money to catch the market up and buy) …..who will pay the rents when they all retire (and they have poorer pensions and don’t own their own home)…….this is a huge financial catastrophe building up for the welfare state in the future. So here are my suggestions;
1). Have a special 40 year mortgage with an initial 5 year fixed interest rate, at say 2%, available to first time buyers where they can borrow up to an amount equivalent to the average monthly rental for a two bedroom property in the area they are buying, where they can demonstrate a savings record or a rental payment record of that amount or more. So for example If they had been paying £700 per month rent or regularly saving that amount without problem for over a year, they could borrow in excess of £200,000 towards a house purchase (by my calculations £200,000 would be just over £600 per month). The scheme should be restricted to properties upto £250,000 only (unless planet London) and no stamp duty apply.
2). Free up pockets of land, currently not available for development, on a restricted basis. I am sorry, but we are going to have to accept development of some small areas of ‘green belt’ at some point. This would be on a licenced basis with only first time buyer homes under £250,000 and bungalows aimed at older buyers (rather than 4 bedroom detached properties aimed at families) being permitted. The landowners would have to accept a restricted price (the benefit to them being that they still have a far more valuable saleable asset) somewhere between agricultural and full building permission land prices….to keep overall development and final price of properties down….thus making this kind of development viable. If they won’t accept the restricted price…then there is no licence to develop the land.
3). Building bungalows will help alleviate the ‘larger property blocking’ problems where residents are stuck in houses too large for them, but cannot find appropriate properties they wish to downsize to. This should then free up many more family homes for sale.
None of its rocket science, but I doubt anyone will listen.
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