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 See Opportunity as House Prices Stall Despite Rate Rises

First-time buyers have been given a glimmer of hope as house price growth stalls, even as mortgage rates remain high. According to The Negotiator, higher rates are limiting what buyers can borrow, but the slowdown in house price increases may help those saving for a deposit.

Adam French, Head of Consumer Finance at Moneyfactscompare.co.uk, stated that higher mortgage rates are “slamming the brakes” on borrowing power. This has led to house prices remaining largely unchanged, which could benefit first-time buyers by preventing deposit requirements from rising as quickly as in previous years.

Recent figures from Lloyds show that average house prices stayed flat last month, with values at £299,253 compared to £299,396 in June. This stability in prices means that the amount needed for a deposit is not increasing as rapidly, potentially giving first-time buyers more time to save.

However, the current mortgage environment remains challenging. Typical mortgage rates are now at 5.6%. For a buyer purchasing an average-priced home with a 10% deposit, this equates to monthly repayments of around £1,670 on a 25-year term, based on borrowing £269,327. This is approximately £110 more per month than before rates increased earlier this year, according to Moneyfacts.

French noted that the rise in rates has made the challenge of meeting monthly repayments more apparent. He advised that those planning to take out a mortgage within the next six months should consider securing a deal soon to protect against further rate increases. If rates fall before completion, buyers can usually switch to a cheaper deal.

For letting agents and inventory clerks, these trends may influence the pace of first-time buyer activity and the demand for rental properties, as affordability pressures and deposit requirements continue to shape the UK property market.