New analysis from Rightmove reveals that first-time buyer asking prices and equivalent asking rents have risen three times faster compared with pre-pandemic years.
Average asking prices for first-time buyer type properties (two bedrooms and fewer) are up 13 per cent since July 2020, compared with the four per cent rise between July 2018 and July 2020.
For prospective first-time buyers looking to save while renting, they face the challenge of record rents that are rising at the fastest rate ever recorded. Average monthly rental payments are 17 per cent higher nationally than they were two years ago.
First-time buyer type properties have hit a new record across Great Britain of £224,943. Therefore, an average 10 per cent deposit needed now stands at £22,493.
This is £2,560 higher than two years ago when the deposit needed was £19,934. Between July 2018 and July 2020, the deposit needed for an average first home only rose by £807.
For new first-time buyers who have been able to save a deposit, get a mortgage and secure a property, they now face average monthly mortgage payments that are 22 per cent higher than two years ago, due to house price increases and interest rate rises.
Rightmove’s Tim Bannister says: “Our affordability analysis highlights the many challenges first-time buyers are trying to navigate right now. For would-be first-time buyers who are trying to save up a deposit, they are chasing a fast-moving target as average asking prices for first-time buyer homes hit another new record, and rise more quickly than they did before the pandemic.
“For those that aren’t able to live with parents or family members while saving, they also have to manage paying record rents both inside and outside of London. We understand how difficult this challenge can be, and something we’ve seen more of over the last couple of years, particularly with working from home becoming more common, is people looking further away or at a greater number of different areas when looking to move, to see what is available within their budget.
“Those that have been able to save up a deposit are now facing rising interest rates when considering what they can afford to repay each month. Given the economic uncertainty at the moment, first-time buyers may seek some financial certainty by locking in a longer fixed-rate mortgage term now, before interest rates rise again.”
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Another report over the weekend from the ONS put average rent increases at 3%. Rightmove data is for new instructions only - when many LLs put their rent up significantly - but for those already renting the increase is much less. Just another way to lie with statistics!
It’s a tragedy, this ( and past) governments have damaged the life chances of our children. To have a secure home is essential for a happy and healthy life, and they have let the “ markets “ decide 😱 well look where we are now, my adult children are still at home paying no “ rent” whilst they both save like mad for a deposit, they are lucky as my wife and I have decided to sell one of the smaller properties and split the money between them, this should not need to happen, so a single guy who has been renting for years will be looking for a new 🏡 home, I don’t wish to do this but my family comes first, and I will NOT have them renting their whole lives. My question is this…. What of the other children who’s parents need to charge them keep, and do not have a 1 bed mortgage free flat ? It is wrong, and even as landlords I am sure you understand this. This government should be ashamed, but I’m sure they will soon move on.
First time buyers Type Property has risen 10 / 13% wonderful this will be the Big Developer’s, in the Government’s pocket with their already over priced high rise Flats. Aren’t those the Flats eligible for special Government Schemes with free stamp duty etc, to stitch them up properly.
I just thought I had read an article about greedy landlords surely they meant Developers.
My Rents haven’t increased at all, (none) some have gone down or in real terms all have gone down while fleeced with Regulatory costs.
Come to Harrow Civic Centre landlord Forum tonight, if you have the stomach to hear all the big wigs telling you what more they have planned to destroy you, good luck.
If the private rental sector had not been under such sustained attack there would be far more flats on the market to rent - and prices would have fallen, not risen.
How many times faster is ''TRUE'' inflation rising since before the pandemic ?
I’m more interested in quality than quantity
Rather have a good solid decent tenant on a lower rent than the opposite….
I'm not convinced FTBs are buying FTB type properties.
In the last 5 years 13 of my tenants have bought.
Only 2 of them have bought 2 bedroom houses.
Most have bought 3 bedroom semis and 2 bought 4 bedroom houses.
None of them bought flats. Four were secondhand houses while the other 9 were new builds with the Help to Buy scheme.
Yes I have noticed this too. Then I was a FTB I could only afford a studio flat!! Which then was in negative equity for years. Now people think a FTB property is a 3 bed house. Something not quite right there.
Jo, if that’s the case they are very wise. However many thousands are buying those Flats and as I understand it all the incentives are for new Build, so the free bee’s and help is not available on older properties unless something has changed.
I have a studio flat in Uxbridge, the price hasn't gone up in the last few years.
You are right, houses seem to have gone up a lot more than flats
In my area flats don't sell well, people don't want them, the only flats I own are the ones where I own the freehold below them
Very wise Andrew!
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