First-time Buyers

First-time buyers squeezed hardest by property inflation

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Data suggests first-time buyer property prices are rising faster than those for any other demographic compounding the affordability struggle to get on the housing ladder.

In June, prices paid by first-time buyers were 12.0% higher year-on-year.

For owner-occupiers, prices increased by 9.5% for the same period, according to the Office for National Statistics.

Brian Murphy, head of lending at Mortgage Advice Bureau (MAB), said: “First time buyers continue to bear the brunt of rising prices, having seen their average purchase price climb 12% in a year compared with 9.5% for existing owners.

“Affordability remains a key concern in the current climate, which means that lenders’ continuing support for first-time buyers, through Help to Buy and mortgage products allowing family assistance, is more important than ever.”

However, overall, the pace came off house prices a little between May and June from 10.45 to 10.2%.

Overall, prices in London continue to show the highest growth at 19.3%, followed by the South East at 9.7% and the East with 7.9%. However, prices are rising strongly across most parts of the UK now with inflation at 6.3% across the UK even excluding London and the South East in June.

On a national basis, prices rose 10.7% in England, 3.5% in Wales, 6.0% in Scotland and 4.9% in Northern Ireland.

Stephen Johnson, managing director, commercial mortgages, Shawbrook Bank, said: “It is encouraging for the balance of the housing market that house prices in regions outside the Southeast are steadily rising.”

He continued: “The strength of house prices over the next year has been questioned recently, but the continued strong growth shown in today’s ONS figures suggests it might be too soon to tell if these questions can be answered.”