First time buyer registrations have plummeted over the past year and the average price of a home purchased by FTBs has risen £4,150 in just one month says Spicerhaart.
“First-time buyer house prices climbed £138 every day in June. A potential first-time buyer on an average salary of £27,000 must be prepared to spend 42 per cent of their take home salary on mortgage repayments, showing the traditional rule of spending no more than 30 per cent of income on housing is no longer reality for many” says Paul Smith, chief executive of the agency, which has over 200 branches.
“As a result, we’ve seen a knock-on effect on first-time buyer registrations which are down 13.6 per cent annually” he says.
Smith says the market needs to be freed-up.
“Efficient use of space is a must and we need to dispel fears that downsizing indicates older home owners have lost their zest for life. Movement in the upper echelons of the market will free up stock at all levels and put the brakes slightly on property price growth” he predicts.
“There are currently 11 buyers chasing every new property to come onto the market in the UK and in London the figure is nearly double at 20:1” he says.
Smith forecasts that the government’s recent announcement that the inheritance tax threshold would be raised to £1m and that an ‘inheritance tax credit’ will be implemented, should encourage those with larger, more expensive homes to downsize.
“This should have a trickle-down effect and boost the supply of starter homes at the lower end of the market, helping first-time buyers” he says.
Smith also says the supply of properties across the UK is down 13.9 per cent annually, measured in June, and that over the past year the average price has increased 6.1 per cent to £216,951.