Even if first-time buyers overcome the hurdles of getting together a deposit and meeting lending criteria, they are still faced with the problem of skyrocketing house prices in a system “rigged” for them to fail. According to data from the Office for National Statistics, the average price of a property bought by a first-time buyer went up […]
Even if first-time buyers overcome the hurdles of getting together a deposit and meeting lending criteria, they are still faced with the problem of skyrocketing house prices in a system “rigged” for them to fail.
According to data from the Office for National Statistics, the average price of a property bought by a first-time buyer went up by 6.3% to £196,459 in the year to January.
For those wishing to live London in London there is even worse news. First-time buyers are paying £429,666 for a property – a staggering rise in price of £29,888 compared to year ago.
Graeme Brown, Shelter’s interim chief executive, said the figures were further evidence that the current housebuilding system is “rigged to fail families” while rewarding big developers and land owners with huge profits.
“Despite all the sweeteners from the government to developers over recent decades, this system has not built the homes we need meaning the dream of homeownership has evaporated for millions of ordinary people,” said Brown.
“The only way to fix the housing crisis is for the government to change the rules of the game completely, by bringing down the astronomical cost of land which would then allow us to deliver the genuinely affordable homes communities need.”
Average house prices in the UK have increased by 6.2% to £218,000 in the past year. Growth is up from December’s figure of 5.7% but still well below the 2016 average of 7.4%.
On a regional basis, London continues to be the region with the highest average house price at £491,000, followed by the South East and the East of England at £319,000 and £279,000, respectively. The North East had the lowest average price of £124,000.
Separate figures from the ONS show that despite record low interest rates, average house prices are now 7.6 times more than average earnings.
Jeremy Duncombe, director, Legal & General Mortgage Club, said: “As house prices begin 2017 on an upwards curve, our country’s housing problem continues to worsen.
“This gap is only going to widen if prices continue to follow this trend, preventing many from taking their first steps onto the property ladder.
“The root of this ongoing problem lies with supply not being able to keep up with demand. To put it simply, we are not building enough homes. Although the government’s recent housing white paper promised change, we need to start seeing these promises being delivered against. It is vital we start addressing these problems head on and find a workable solution to this major issue.”
Shaun Church, Director at Private Finance, said: “Affordability also remains a concern. While the annual rate of house price growth fell steadily between June and November 2016, in the past two months it has been creeping up again.
“Mortgage rates are at record lows, helping more buyers onto the ladder, but saving for a deposit remains a challenge for many. House building levels are still not at the level they need to be, and if action isn’t taken to address lack of supply soon, rising house prices will undoubtedly block some from accessing the market.”
