This is according to Zoopla’s latest House Price Index which revealed that the average price of a home for a first-time buyer is £254,750.
Zubla said the amount by which the average first-time home buyer rose last year was almost three times the headline rate of growth for UK property prices more broadly. In fact, typical homes for all buyers rose 1.5% to £271,900.
The Zoopla data comes as a report by the Mortgage Advice Bureau (MAB) found that first-time buyers could benefit from up to £40,000 more in mortgage borrowing this year than last thanks to easing affordability tests.
The MAB report revealed that many potential buyers were underestimating their borrowing potential. The Zoopla report also showed that although first-time buyers spent more, the number of buyers was also lower.
In fact, it said the combination of rising mortgage rates and increased uncertainty had led to a 6% drop in first-time buyer inquiries, with some adopting a “wait and see” approach from the sidelines.
However, those who were active in the market made no concessions, and outside London, more than half of first-time buyer inquiries (53%) were for three-bedroom homes – the same as last year. In London, the property mix is also unchanged, with more than half of inquiries focusing on apartments.
Zoopla said average house prices for first-time buyers in the capital passed £500,000 for the first time to reach £502,250 – that’s £15,000 higher than last year.
It was changes to the mortgage affordability test that made homes more affordable for first-time buyers. Zoopla data shows it now accounts for more than a third of sales each year.
The Zoopla report also revealed a 1% increase in agreed sales compared to last year despite overall buyer demand being down 10% from last year.
This is because browsers and those sensitive to higher borrowing costs have declined. Meanwhile, buyers with a clear need to move continued to make offers on homes.
Richard Donnell, CEO at Zoopla, said: “We are in peak months for homebuyers making offers and agreeing to sales.
“Although the number of buyer inquiries is down compared to last year, more sales are being agreed as committed conveyancers move forward as mortgage rates fall.
“Many households are understandably cautious given the wider uncertainty. If you are considering a move, the most important step is to understand what is happening in your local market rather than relying on national trends.
“Getting advice from a local estate agent is important and for sellers in the south of England, pricing right can be the difference between moving and not moving this year.”
