Properties favoured by first-time buyers are typically selling for an average of 8% or £20,300 below the local market average, Zoopla analysis suggests.
Research suggests the average price of a typical home purchased by a first-time buyer (FTB) is £244,100, compared with £264,400 across all properties.
This is despite first-time buyers purchasing a property at an increase of £2,800 (1.2%) compared with a year ago, Zoopla said.
The discount is as much as 26% in areas such as London.
Even higher mortgage rates haven’t made a large dent in the discounts available.
The average first-time buyer is paying mortgage bills that are 27% - or £213 per month - higher than if they’d purchased their home in the fourth quarter of 2022. The average £990 per month figure is still lower than the UK average rent of £1,221 per month, proving that deposits remain a barrier to entry for many would-be buyers, Zoopla said.
Region
|
FTB house price (£)
|
Price of all homes (£)
|
Price difference (£)
|
% discount
|
London
|
399,000
|
536,800
|
137,800
|
-26%
|
South East
|
321,400
|
386,400
|
65,000
|
-17%
|
East of England
|
316,700
|
337,700
|
21,000
|
-6%
|
South West
|
241,500
|
313,700
|
72,200
|
-23%
|
East Midlands
|
211,300
|
228,400
|
17,100
|
-7%
|
West Midlands
|
196,800
|
229,300
|
32,500
|
-14%
|
Wales
|
174,700
|
203,300
|
28,600
|
-14%
|
North West
|
164,100
|
194,800
|
30,700
|
-16%
|
Scotland
|
161,400
|
162,100
|
700
|
0%
|
Yorkshire & the Humber
|
153,800
|
185,900
|
32,100
|
-17%
|
North East
|
117,900
|
140,800
|
22,900
|
-16%
|
UK
|
244,100
|
264,400
|
20,300
|
-8%
|
Traditionally, many FTBs would look for a smaller home in order to get on to the property ladder with a view to upsizing in future. This has been the case in London, where 66% of first-time buyers are enquiring about flats, up from 63% a year ago. Similarly, Scottish FTBs are also now more interested in flats compared to 2022, Zoopla's research found.
However, the average age of a first-time buyer in the UK is 33, which means many may be buying with family needs in mind. In fact, nearly twice as many first-time buyers now have dependent children, compared with the pre-2007 financial crisis period.
As a result, terraced homes are one of the most affordable and sought-after options for those looking to buy a family-sized home, the research found.
This is particularly true for southern England where more than a third (37%) of enquiries are for terraced homes, compared with one in four (43%) in the North and 46% in Wales. In the Midlands, classic three-bed semi-detached homes are the most popular choice for first-time buyers where prices have remained flat to 2022.
The analysis found that only 27% of first-time buyers are looking for their first home 10 miles or more from where they’re currently living, down from 29% a year ago as the number of homes on the market increased. Morethan half (55%) enquire about homes within a 5-mile radius from where they are based, Zoopla said, which is a bigger proportion than other buyer group (48%). FTBs are more likely to look for a home more than 10 miles away in southern England where affordability is a bigger barrier.
Izabella Lubowiecka, senior property researcher at Zoopla, said: “We expect more first-time buyers to come to market in 2024, particularly in the second half of the year thanks to a combination of reduced mortgage rates, earnings growth and improved affordability.
“But the reality is that many would-be buyers might be able to get on the ladder now by considering different property types or alternative locations that offer better value for money. First-time buyers are in a stronger position in the current buyer’s market so we encourage them to be resourceful and assess all the options available to them.”
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