Property Prices

First-time buyer deposits up 11%

First-time buyers are having to save up even larger deposits before they can take their first step on the property ladder, it has been claimed.

Data from finance site Moneyextra puts the average mortgage deposit being saved by first-time buyers in February as £37,632, almost 11 per cent higher than it was one year ago.

Price pressure on new buyers eased last month, the firm said, with the annual increase in house prices for first-time buyers standing at 4.68 per cent and bringing the average property price for this group to £177,096.

However, it added, the slowing in price rises will also reflect the fact that fewer Britons can now afford to buy their own home.

The site's Robin Amlot commented: "It's no wonder the so-called lower end of the housing market is stalling with young people attempting to get onto the housing ladder being required to save a figure effectively equivalent to more than a year and half's average earnings."

Recent research from property site spareroom.co.uk claimed that the average age of tenants was rising as people found it harder to afford their own homes, with the typical flat-sharer on the site set to be 40 years old by the time of the London Olympics if the trend continues.

LettingAgent.com comments ‘More and more tenants are staying put and it is likely that Buy To Let landlords will benefit greatly.’

Landlord Mortgages comments ‘Whilst Buy To Let Mortgages remain popular I am sure we will all find that more and more property will be snapped up by landlords who do have the size of deposit required to purchase property. Unless house prices ease, which I doubt, the situation will get worse for first time buyers.’

Central London sees 32% annual house price growth

The average price of property in prime central London locations rose by 3.1 per cent in March - the highest monthly rate of growth on record, the latest figures show.

Consequently, the annual rate of house price growth in these areas has risen to an "astonishing" 32 per cent according to property firm Knight Frank, which is likely to be good news for landlords expecting capital appreciation on homes there.

Prices have been rising in the prime central London market for 27 consecutive months in a row now, the firm's data indicates, with the last price fall recorded in December 2004.

Knight Frank's head of residential research Liam Bailey said that as City bonus money filters out of the market, continued strong price performance could be explained by supply shortages and international demand.

He commented: "The supply of newly available property fell by 27 per cent compared to the total for February while the number of new prospective purchasers increased by 16 per cent, fuelling the price rise in the market."

Residential agent Hamptons International recently identified a "staggering" increase in rental prices across London, with rents rising by up to 18 per cent in 12 months thanks to low property stock levels and increasing numbers of prospective tenants.

LettingAgent.com “Even though our uptake of new instructions is partly due to our 3% Letting service we have found a general lack of property for rent. London property tends to lead the way, so we are expecting rents to climb sharply in the whole of the UK this year.”

Landlord Mortgages “Our recent press release highlighted that we expect rents to increase by as much as 20% this year. If landlords do not start buying again soon then it is likely that rents will rise in even higher!”

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