House prices have continued to rise throughout the year, making it increasingly challenging for first-time buyers to join the property ladder.
UK price comparison website Compare the Market predict that these trends are likely to persist.
By analysing data from Office for National Statistics from 1992 to 2020, combined with a forecasting model, comparethemarket.com was able to predict future house prices. The entire study can be viewed here.
The future first-time buyer
The research shows that for residents living in Greater London, their first home is likely to cost 63% more than in 2021. In other areas of the UK house prices are predicted to increase by 58%.
In the next 10 years, the average home in the UK will rise by 30%, costing a staggering £323,718, and increase by 33% in Greater London to £619,568. By 2031, house prices in Greater London are predicted to increase by a third (33%).
If house prices do climb to these prices, it will make it much more difficult for first-time buyers to purchase. Currently, the average age of a first-time buyer in London is 35 years old, but in 2031, it is expected to rise to 37. For the rest of England by 2031, the average age of first-time buyers is predicted to shift to 35.
Chris King, head of home insurance at Compare the Market says: “Despite house prices seeing an all-time high and the average age of first-time buyers set to increase over the next ten years, it’s interesting to see that buying habits have remained similar.”
“For those who are yet to buy but are planning on doing so in the future, it’s important that you take out the correct insurance policies, ensuring that both your home and contents are covered ready for when you move in, should the worst happen.”
British homeowners who purchased their homes in the last 10 years took part in a poll conducted by Compare the Market. The answers help understand if homebuying habits have changed over time.
The findings show that almost half (47%) purchased their home with their partner and they would do this in the future. Very few participants (9%) expressed that now they are less likely to seek financial help from others.
The participants were asked if they would do anything differently if they were to purchase a home in 2021. Almost a quarter (23%) believed they would spend more on the overall value of the property and 20% would not change a thing.