Will the Recent House Price Slowdown Help First-Time Buyers Make Their Move?
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Will the Recent House Price Slowdown Help First-Time Buyers Make Their Move?

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Carl Shave Carl Shave | June 20, 2017


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The latest figures from the Office for National Statistics show that property prices fell by a £1,000 a month between February and March this year, as the rate of annual property inflation continued to slide. However, despite this decrease, house prices are still 4.1 percent higher than they were at the same time last year, with the average price of a property in the UK at £216,000 in March 2017. The regions with the highest property growth during that time were the East of England and the East Midlands, with both showing price growth of 6.7 percent for the year. The lowest level of growth could be found in the North East, where prices fell by 0.4 percent for the year, and London, where they grew by just 1.5 percent.

Buyers Just Don’t Have the Money

In London, demand for properties is still strong, but buyers, particularly first-time buyers, simply do not have the money they need to get on the housing ladder. Those that do are being left frustrated because properties that are being down-valued are subsequently being taken off the market. According to the latest Hometrack UK Cities House Price Index, property price growth in London, which was running at 13 percent a year ago, has now fallen to just 3.5 percent. This trend looks set to continue as house price growth is predicted to slow further, by between 2 and 3 percent by the end of the year. That means there could be a real fall drop in house prices in London for the first time since 2011. There has also been a sharp fall in other southern cities where prices are way above the national average.

Is the Time Right for First-Time Buyers?

That really does depend on the location. The areas that have seen a fall in the rate of house price growth are those where prices were high to start with, such as London, Bristol, Oxford and Cambridge. In those areas, the proportion of affordable housing is low, so first-time buyers will still struggle to get on the housing ladder. In locations that have seen significant house price rises, first-time buyers will find they now have to pay considerably more than they would for the same properties last year. However, that said, a reduction in the rate of house price growth can never be a bad thing for first-time buyers. The rate at which new houses are being built is also on the up. Add to that the fact that mortgage rates are at record lows, and the current abundance of 95 percent mortgages at the moment, and now could be a good time for first-time buyers to make their move. Wondering whether a 95 percent mortgage could be suitable for you? Get in touch with our mortgage experts for free, confidential advice about your mortgage options.