The cost of taking the first step on the property ladder is soaring according to new figures from estate agent chain haart.
The firm says that the price of a typical starter home has risen by almost 10% in the past 12 months. This compares with UK-wide property price inflation of 7.3%.
The average price of a first home is now £169,259 while the overall typical property price has increased to just under £220,000. Rising prices are putting extra pressure on first-time buyer deposits, haart found: the typical down payment for new buyers rose 7% between July and August to £34,472 – 20% of the average purchase price.
Paul Smith, CEO of haart, said: “It is concerning to see the growth in the price of starter homes outstripping the rest of the market as it means it is becoming increasingly difficult for first-time buyers to get on to the property ladder.
“The 10% annual increase in first-time buyer house prices comes as a result of a shortage of homes, due to lack of building but also the absence of fluidity in the upper echelons of the market, as people who might otherwise be moving to their second or third home hold on to their current property for its value to increase further.”
Smith said that current economic conditions should encourage people who were thinking of selling to put their homes on the market.
“With good availability of fixed-term mortgages and a number of ‘known unknowns’ in the near future such as interest rate rises our advice for on-the-fence sellers is to do so now while the conditions are favourable.
“We need all levels of the market to take advantage of current positive market conditions to ensure there is movement and appropriate homes are available to the various demographics looking to buy or move up the property ladder.”