First time buyer house prices hit record high
The average house purchased by a first-time buyer is now more expensive than ever with prices rising £5,000 in the last month alone.
Figures from LSL found the average purchase price in January 2014 was £155,832, up on the £150,875 figure recorded in the previous month and 16.4% higher than the same point last year.
Despite the government's Help to Buy scheme aiming to help borrowers with small deposits onto the housing ladder the average loan-to-value also rose in the same period, reaching 82.3% in the first month of the year.
Compared to the start of last year the average first-time buyer deposit has risen more than £500 to reach £27,519. With real wages falling due to high inflation and stagnant pay, the average deposit represented 75.1% of a first-time buyer's income in January, up from 74.7% in the previous month.
David Newnes, director of estate agents Your Move and Reeds Rains, said the government must increase house building or the Help to Buy scheme will simply push house prices upwards.
"As first-time buyer house prices continue their upward climb, Help to Buy is needed more than ever to keep the market accessible to all. But the market needs more than that. Far more house-building must come hand-in-hand with higher LTV lending.
"More building will ensure Help to Buy doesn't become a permanent crutch to the market; we need to increase our stock of affordable homes and reduce the competition between buyers to ensure a sustainable recovery."
Separate figures from Hometrack found London and the South East dominated the first-time buyer market with 38% (28,100) of total transactions in the capital and surrounding counties.
In London the average deposit is now £64,160 By comparison, the average first-time buyer deposit was just £13,393 in Northern Ireland and just £13,814 in Wales.
Article from Mortgage Solutions http://m.mortgagesolutions.co.uk/mortgage-solutions/news/2331793/first-time-buyer-house-prices-hit-record-high