UK house prices: First-time home buyers priced out of market

 
Chris Papadopoullos
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House prices were 3.3 per cent higher in June (Source: Getty)
Annual house price growth has slowed to a two-year low, according to a major mortgage provider.

But months of fast growth has left first-time buyers struggling to put deposits together, despite government programmes to help them.

House prices were 3.3 per cent higher in June than in the same month last year, Nationwide said. It marks a slowdown from May’s 4.6 per cent growth.

Other surveys point to faster growth. Halifax shows price growth running above 8.6 per cent in May while Rightmove said June’s prices were 4.5 per cent higher on the year.

“A slowdown in house price inflation is good news for those looking to get on the property ladder; however, we don’t expect this trend to last. Unfortunately, the current level of housing supply is insufficient to cope with demand, which will drive up prices in the remainder of the year,” said Stephen Smith, director at the Legal and General Mortgage Club.

“Prices are already climbing well above the level of inflation, which is making it difficult for aspiring homeowners to enter the market.”

Smith believes 250,000 homes need to be built a year to taper price growth.

More first-time buyers are struggling to reach the first rung of the housing ladder. There were 18 per cent fewer completed by first-time buyer purchases in May than a year ago, according to figures released today by estate agents Your Move and Reeds Rains.

The average deposit first-time buyers had to pay during the first six months of this year was up six per cent on last year, Halifax said today, while the number of first-time buyers dropped by seven per cent over that time.

“Many first-time buyers are still on tight monthly incomes, struggling to save while savings rates stay so low. Meanwhile, deposits are rising primarily as property prices continue their seemingly unstoppable upwards march,” said Adrian Gill, a director of Your Move and Reeds Rains.

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