This is according to the latest Zoopla House Price Index which revealed the average first-time buyer house is £254,750.
The amount by which the average first-time buyer house has risen in the last year is nearly three times the headline rate of wider UK property price growth, said Zoopla. Indeed, typical homes for all buyers have risen 1.5% to hit £271,900.
Zoopla’s data comes as a report from Mortgage Advice Bureau (MAB) found first-time buyers could potentially tap into up to £40,000 more in mortgage borrowing this year than last thanks to easing of affordability tests.
MAB’s report revealed many potential buyers were underestimating their borrowing potential. And Zoopla’s report also showed, despite first-time buyers spending more, there were also fewer.
Indeed, it said, the combination of higher mortgage rates and increased uncertainty had led to a 6% drop in first-time buyer enquiries, with some adopting a ‘wait and see’ approach from the sidelines.
Yet those who were active in the market were not compromising and outside London, over half of first-time buyer enquiries (53%) were for three-bed houses – the same as last year. In London the property mix is also unchanged, with over half of enquiries focused on flats.
Average first-time buyer house prices in the capital breached the £500,000 mark for the first time at £502,250 – this is £15,000 higher than last year, said Zoopla.
It was the changes to mortgage affordability testing which have made homes more accessible to first-time buyers. And Zoopla’s data shows they now account for over a third of sales each year.
Zoopla’s report also revealed there had been a 1% uplift in sales agreed compared to last year despite overall buyer demand being 10% lower than last year.
This is because browsers and those sensitive to higher borrowing costs have stepped back. Meanwhile, those buyers with a clear need to move have continued to make offers to buy homes.
Richard Donnell, executive director at Zoopla, said: “We are in the peak months for home buyers making offers and agreeing sales.
“Despite fewer buyer enquiries than last year, more sales are being agreed as committed movers press ahead as mortgage rates drift lower.
“Many households are understandably cautious given the wider uncertainty. If you are thinking of moving, the most important step is understanding 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 southern England, pricing correctly is the difference between moving and not moving this year.”