House prices for first-time buyers hit record high of £225,000

First-time buyers are now paying much more to get on the property ladder as the average cost of a first home has now hit an all-time high. As well as increased mortgage rates, new homeowners are new facing higher house prices with a typical first-time buyer property now costing around £224,963.

According to Rightmove, a standard first-time buyer home is a two-bed or smaller property including houses or flats. The new record high comes after the average price for these properties has gone up by 2 percent in the last year alone.

Despite it becoming more difficult to own your own home, buyer demand amongst first-time buyers is now 11 percent higher than in the same period in 2019, according to Rightmove. It is thought that as soaring rents are reaching new records, buying is continuing to be compelling for those who can raise the deposit and obtain a mortgage.

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In more positive news, the average first-time-buyer mortgage rate for a 5-year fixed term has now fallen to 4.46 percent.

Rightmove says lender competition to secure business is now strongest in the traditional first-time buyer loan-to-value ranges of 85 percent and 90 percent.

"The first-time-buyer sector typically accounts for over a third of all sales which are often the start of chains, so these positive sales agreed figures are good for the health of the whole market," said Tim Bannister, Rightmove’s director of property science.

"The current multi-speed market is highlighted by sales of larger homes continuing to lag behind, with some sellers in the upper sectors likely needing to show a greater degree of pricing restraint to attract buyers in this much more price-sensitive market.

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