The UK housing market continues to see record-high asking prices, with properties popular among first-time buyers reaching an average asking price of £224,963, according to Rightmove.
This represents a 2% increase from the previous year, despite higher mortgage rates, making it harder for buyers to afford properties. However, the first-time buyer sector has seen a 4% increase in sales from March 2019, suggesting that this section of the market is outpacing the rest. Tim Bannister, director of property science innovation at Rightmove, said that this was “good for the health of the whole market,” as first-time buyers often initiate chains between buyers and sellers.
Nevertheless, Bannister added that it remains a challenging environment for first-time buyers to get onto the ladder, with new record average asking prices and higher borrowing costs compared to the previous year. The overall number of sales agreed is 18% lower than last year, indicating a return to “a more normal level” of activity in the market. Despite this, Rightmove reports that asking prices have only increased by 0.2% this month, to an average of £366,247, which is a smaller increase than the average 1.2% seen at this time of year.
Tom Bill, head of UK residential research at Knight Frank, said that the drop in property sales following the shock of last year’s mini-budget had “bottomed out”. He added that the mortgage market had stabilised and that buyers increasingly accepted they were operating in a new lending landscape after 14 years of ultra-low rates.
Overall, the UK housing market remains challenging for first-time buyers, with high asking prices and higher borrowing costs compared to the previous year. Nevertheless, the first-time buyer sector is showing signs of strength, with sales increasing by 4% from March 2019. This indicates that the sector is outpacing the rest of the market, which has seen a drop in sales compared to last year. Despite the challenges, the housing market is stabilising, with the number of sales agreed returning to a more normal level of activity.