According to Rightmove, a property website, the average asking price for a first-time buyer home in the UK hit a record high of £224,963 in April, a 0.2% increase from March. Rightmove
defines a first-time home as a property with no more than two bedrooms. The surge in rents could be prompting some renters to become first-time buyers and enter the housing market despite a year of interest rate hikes by the Bank of England.
In recent months, there has been some evidence that mortgage rates are stabilising, albeit higher than a year ago. This is a positive development for the overall market as the first-time-buyer sector typically accounts for more than a third of all sales, which often kick-start chains. However, despite the market stabilising, getting onto the property ladder remains challenging due to record average asking prices and higher borrowing costs than a year ago.
According to Rightmove's index, the average price of a home coming to market rose 0.2% to £366,247 in April, an increase of 1.7% compared to the previous year, the slowest pace since December 2019. Sales of larger homes continue to lag behind, and some sellers in the upper sectors may need to show pricing restraint to attract buyers in this more price-sensitive market. While competition among lenders in the smaller deposit, higher loan-to-value ranges is good news for those first-time buyers who have saved up their deposit and can afford to move, the market is still challenging.
Prices in London and the North-East of England fell compared to the previous month, while prices were largely unchanged in London compared to a year earlier. Estate agents have seen a modest increase in recent activity, particularly compared to only a few months ago, and the beginning of the spring market has been a turning point after a challenging start to the year and the turbulence of the last three months of 2022. Listing figures are comparable to last year, and viewing figures are only slightly down, which is remarkable given last year's exceptional market, according to Kate Tatler, managing director at Wirral's Karl Tatler Estate Agents.