Editor's note: This brief was summarised by The Property AI Newsroom from a report by The Negotiator. Read the original article for full details.
First-Time Buyers Paying More Despite Higher Mortgage Costs
First-time buyers are driving house price growth in both the North and South of the UK, according to a regional update reported by The Negotiator. Data from Zoopla shows that first-time buyers are now seeking homes priced at an average of £254,750, which is 4.3% higher than a year ago and nearly three times the headline rate of UK house price growth.
Despite higher mortgage costs, first-time buyers remain active in the market and are paying more than other buyers to secure properties. In London, the average first-time buyer purchase has exceeded £500,000 for the first time. In Scotland and the West Midlands, first-time buyers are targeting homes that are 8% and 7% more expensive than a year ago, respectively. Outside London, more than half of first-time buyers continue to search for three-bedroom houses, while in London, the majority are looking for flats.
Regional House Price Performance
House price performance continues to vary across the UK. The North East and North West are consistently seeing year-on-year rises, although the increases are lower than in previous months. According to Halifax, the North East saw prices rise by 3.1% over the year to £181,703, and the North West recorded annual growth of 3.0%, with the average home now costing £248,304. In contrast, southern markets are experiencing price falls. The South East led declines, with prices down 2.1% year-on-year to £382,704, while London saw average values fall by 1.5% to £534,375.
Rightmove reports that prices have fallen across all southern England regions and Wales, while more affordable northern areas such as the North East and Scotland are holding up better compared to last year. Zoopla notes that in the North East, home sales are up 6% on last year despite buyer demand being 20% lower, with no increase in homes for sale, leading to above-average price gains. In London, sales agreed are up 8% on last year, the strongest of any region, which has helped stabilise house price inflation after several months of modest price falls.
For letting agents and inventory clerks, these trends highlight ongoing regional differences in market activity and the continued importance of first-time buyers in supporting entry-level property prices.
Source: The Negotiator