UK first-time buyer house prices reach record

Soaring rents may be encouraging people to move into home ownership, according to Rightmove

New-build houses in west London. Rightmove says the UK housing market is stabilising. Reuters

The average asking price for a first-time buyer home in the UK reached a record high of £224,963 in April, according to property website, Rightmove.

It was a rise of 0.2 per cent on the March figure.

Rightmove defines a first-time home as a house or apartment having no more than two bedrooms.

Large rent increases may be prompting some renters to become first-time buyers and make the move into being homeowners, despite more than a year of interest rate increases by the Bank of England.

There has been some evidence in recent months that mortgage rates, while higher than a year ago, are stabilising.

“The first-time-buyer sector typically accounts for over a third of all sales, which are often the start of chains, so these positive sales-agreed figures are good for the health of the whole market,” said Tim Bannister, director of property science at Rightmove.

'Remains a challenging environment'

Across the broader housing market, Rightmove's index found that the average price of a home coming to market increased by 0.2 per cent or £890 in April, taking the average asking price to £366,247.

That means average asking prices rose 1.7 per cent when compared to April 2022, the slowest pace since December 2019, before the Covid pandemic and government tax breaks triggered a buying bonanza.

Rightmove said the market was now more stable.

“The current multi-speed market is highlighted by sales of larger homes continuing to lag behind, with some sellers in the upper sectors likely needing to show a greater degree of pricing restraint to attract buyers in this much more price-sensitive market,” Mr Bannister said.

“More competition among lenders in the smaller deposit, higher loan-to-value ranges is positive news for those would-be first-time buyers who have saved up their deposit and can still afford to move.”

“However, it remains a challenging environment to get on to the ladder, with new record average asking prices and higher borrowing costs to budget for than a year ago.”

London and the North-East of England were the only regions to see prices fall compared to the previous month.

Prices were largely unchanged in London compared to a year earlier, with the affluent borough of Kensington and Chelsea suffering the biggest fall.

Elsewhere in the UK, estate agents have seen a modest increase in recent activity, especially when compared to only a few months ago.

“The beginning of the spring market has been a real turning point, after a difficult start to the year and following the turbulence of the last three months of 2022,” said Kate Tatler, managing director at Wirral's Karl Tatler Estate Agents.

“Listing figures are comparable with last year, while viewing figures are down only slightly, which given the exceptional market of last year is quite remarkable.”

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