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First-time buyers face record house prices as sales recover

Residential living in South-East London, UK house price
The average first-time buyer house price hit a new record of £224,963 this month. Photo: Getty (Karl Hendon via Getty Images)

The average price of a house coming to market in the UK in April hit £366,247, as sales return to pre-pandemic levels.

First-time buyer type properties have seen an 11% demand increase compared with the same period in 2019, as many tenants are deciding to leave the competitive rental market, with soaring rents reaching new records, according to Rightmove.

However, first-time buyers still need to secure a mortgage — which have become more expensive since the calamitous Liz Truss mini-budget — and enough savings for a deposit.

First-time buyer type properties hit a new record price of £224,963 this month.

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Read more: Rents set to increase as ageing buy-to-let landlords retire

However, average mortgage rates have been falling over the last few weeks, with lender competition to secure business now strongest in the traditional first-time buyer loan-to-value ranges of 85% and 90%.

“More competition amongst lenders in the smaller deposit, higher loan-to-value ranges is positive news for those would-be first-time buyers who have saved up their deposit and can still afford to move,” Tim Bannister Rightmove’s director of property science, said.

“However, it remains a challenging environment to get onto the ladder, with new record average asking prices and higher borrowing costs to budget for than a year ago.”

The average mortgage rate for a five-year fixed, 15% deposit mortgage is currently 4.46%, with the lowest rate for this mortgage type standing at 4.19%. This has edged down from an average of 4.65% a month ago, but it is still much higher than the average rate of 2.64% at this time last year.

Agreed sales volumes are now just 1% behind March 2019 with the strength of the improvement since the start of the year defying the expectations of many.

Read more: Interest rates: A guide to 'mortgage hopping' to get the best deal for your property

“Buyers may have struggled to find a home that suited their needs in the stock-constrained market of recent years and will now find more choice available,” Bannister added.

“However, those who have now decided to make a move should not wait around too long to make an enquiry if they see the right home for sale, as not only is the number of sales agreed now back to pre-pandemic levels, but homes are also on average selling twelve days more quickly than at this time in 2019.”

Watch: How much money do I need to buy a house?

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