Increasing house prices lead to slow-down in market
House prices in the UK have risen sharply in recent years, according to a new report from Halifax, leaving first-time buyers needing an ever-increasing deposit to gain a foothold on the property ladder.
Despite efforts by the government to make it easier to purchase a first home, potential UK home buyers are finding themselves priced out of the property market due to the sizeable deposits needed, causing their numbers to drop for the first time in four years. Experts believe the crisis is due in part to the lack of cheaper new build properties available, as well as the general increase of house prices – with few areas bucking the trend.
In London, the average deposit needed for a first home is over £90,000, with those outside the capital needing a deposit in the region of £33,000 thanks to an 88% increase in necessary capital since property prices last peaked in 2007.
The size of the deposit is not the only issue facing buyers, with one in four first-time home buyers in 2015 taking a 35-year mortgage as opposed to 30 years, and the number of buyers applying for 20- or 25-year terms falling by 18%.
“The downside is that over the whole term it does cost a lot more if you take out a longer mortgage,” said Craig McKinlay, mortgages director at Halifax.
“Although the average price of the typical first-time buyer home has grown by 10% in the past year, the number of buyers taking that first step onto the housing ladder has been supported by favourable economic conditions; namely, record low mortgage rates, rising employment and real pay growth.”
With the number of first-time buyers falling by 0.5% from 2014 figures, this latest research has left many within the industry worried that those with houses already on the market looking for a quick house move will find it increasingly difficult to sell, as the pool of those who can afford them rapidly diminishes, with property buying companies becoming an progressively viable option.
If you’d like to sell your house quickly, ask National Homebuyers for advice, as we guarantee to buy any home. Call 08000 443 911 or request a call back to find out how much you could get for your property.