Prices for first-time homes on the rise

Wednesday 23rd November 2016

The latest figures from Rightmove have shown that first-time buyers are paying an average of £15,000 more for a starter home than 12 months previously.
There was an 8.2% rise in the price of homes with two bedrooms or less, which is double the average growth witnessed across the rest of the market.
By contrast, there has been a 1.1% fall since October in the national average asking price for homes with three bedrooms or more, while smaller homes have experienced growth of 1.7% in November. 
In fact, the first-time buyer market is the only market to show an increase in prices this month, according to the Rightmove data. 
First-time buyer activity, however, has remained strong despite these price increases, with buyer activity up by 13% in the year to September 2016 (CML's Monthly Lending Trends).
Although first-time buyer generally suggests a younger demographic, the average age of this kind of purchaser is actually 33. Those aged 21-24 years old were less encouraged by the market, with Rightmove's report finding that most of this age group believe now is a “bad time to buy”.
For first-time buyers, the main issue is cobbling together a big enough deposit. With interest rates at their lowest ever level, mortgage deals are very, very competitive at the moment. Which means, ironically, it is currently cheaper to be a homeowner than has been the case for some time. The problem, however, is raising the necessary funds in the first place, to then take advantage of the favourable borrowing conditions. 
In today's Autumn Statement, the first by the new Chancellor Philip Hammond, the issue of first-time buyers and affordable housing was addressed. 
As things stand, there are a number of first-time buyer hotspots across the country, including Barking and Dagenham in London, parts of Cambridgeshire and the popular commuter towns of Margate and Ramsgate on the South Coast. 
What's more, Birmingham, Liverpool and the old seaside town of Scarborough are seen as other hotspots for affordable homes, while the East Riding of Yorkshire – with its postcard-perfect towns and villages – is also very popular among first-time buyers. 

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