First – time buyers fail to take advantage of house price slowdown
The current property market has been very weak over the last year. But it appears that first-time buyers have been unable to take advantage of this, with house prices increasing more for them than other purchasers.
According to Halifax the average cost of a home for a first-time buyer in 2019 has increased by 9% to £231,455 which is an increase of £18,252 compared with 2018. The overall average growth of house prices in 2019 was 1.4% which shows that the price for first-time buyers outstrips everybody else by a high margin.
Factors that may have contributed to this sharp increase
Firstly, there is a trend for first-time buyers to save slightly longer and buy a larger family home instead of buying a small flat which means they will need to move again in three- or four-years’ time.
Secondly, there is the Government scheme called the Help to Buy ISA. In this ISA you can deposit £1,200 into it and save £200 per month after that. You can save a maximum of £12,000 into you ISA and when you want purchase your first home the Government will give you a 25% bonus, this will be an additional £3,000 if you save the maximum of £12,000. Furthermore, less expensive mortgages may have encouraged some first-time buyers to borrow more in order to purchase a better property.
Russell Galley from Halifax said: “While price growth in the overall housing market has been modest in recent years, the level of inflation facing first-time buyers is greater, which compounds the challenge in raising bigger deposits. However, given their importance to the market as a whole, it’s reassuring that the overall number of new buyers getting on the ladder remains stable.”
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