Britain's housing market is being propped up by a surprisingly persistent group
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Loading... - Gregory Jones
- 20 Apr 2023
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Average prices are falling – but sales are being boosted by an unlikely source
The property market is being saved from a house price crash by an unlikely source – renters buying their first home.
Fed-up with competing for rental properties at extortionate prices, thousands are stretching their finances to get on the housing ladder despite sky-high mortgage rates.
House prices have slumped 4.6pc from peak in August to an average of £257,122, according to lender Nationwide.
However, experts say this fall would be much bigger were it not for demand from first-time buyers, which now represent the highest proportion of buyers on record.
Some 27.1pc of property sales have gone to first-time buyers this year, up from 26.7pc last year and 23.8pc in 2021, according to Hamptons. This is the biggest proportion since the estate agent’s records began in 2009.
Soaring rents
Persistent demand from first-time buyers has confounded expectations.
“Normally in a period of stress you would expect first-time buyers to be hardest hit,” says Neal Hudson, of analyst BuiltPlace. “It’s surprising that they’re the most resilient group.”
But he says a “terrible” rental market, replete with rising prices and a shortage of available properties, is making buying a more attractive option for many.
Rents on newly-let properties have surged by 8pc in the past year, according to Hamptons. The average rent is £1,236 a month.
Tenants are under the most pressure in London, where rents have ballooned by 16pc – more than anywhere else in Great Britain. Read More…
