The first-time buyer market is the top performing property sector in the UK right now, according to the latest report from Rightmove.
Calculations from the giant online property portal showed that the price of one and two bedroom properties in the UK increased by 3.5 per cent in June (£199,943) compared to £193,242 in May. The year on year figure jumped even higher with a 5.5 percent increase.
Both the ‘second’ and ‘luxury’ property sectors also experienced year-on-year increases, but these were far less dramatic at 2.7 percent and 1.0 percent respectively.
Unshakeable confident of youth fuelling first-time buyer market
Miles Shipside, Rightmove’s director and housing market analyst attributed the more successful growth of the first time buyer market to more confidence in the sector – or at least by those purchasing property. This, he believes, is coupled with the traditional British desire to own bricks and mortar.
“Those at the traditional starter level are brushing aside uncertainty, with demand being fuelled by the ongoing desire for home-ownership, government assistance, and mortgage repayments often being cheaper than rent for a similar property,” he said.
“Increasing prices in this sector have not been enough to shake off the wish to own your first home, whilst in contrast sectors higher up the ladder the ladder with a larger proportion of discretionary movers have seen the greatest recent price wobbles.”
Brexit causing reluctance amongst ‘older’ buyers
Shipman went on to blame Brexit and the unexpected results from the recent snap election for the reluctance of buyers in the other two sectors.
“It now seems certain that we will have continuing political uncertainty, which the housing market traditionally dislikes, and with the first fall in June prices for eight years there is no doubt that the lack of stability is a factor,” he said.
North is better performing half
The results also showed a widening gap between the performance of the UK housing market in the North and South. Prices in the South of the country performed less well than their Northern neighbours (an annual increase of 3 per cent compared to 11 per cent respectively).
Northern regions such as the East Midlands with an average price increase of 5.1 per cent and the East of England with 3.8 per cent performed best. In Greater London prices actually dropped – both on a month by month basis and year on year.. Other areas to experience house price drops, according to the report, were the West Midlands (minus 0.8 per cent last month) and Wales (minus 0.5 per cent year on year).
House prices in London fell by 2.4 per cent last month from £649,864 in May to £634,321. The decrease on an annual basis wasn’t quite as steep at minus 1.4 per cent (the annual house price sitting at £643,117 in June 2016).
In terms of individual regions, Kensington & Chelsea fared best with a year on year increase of 16.1 per cent, Barnet was next with a 10.2 per cent increase and Greenwich with 8.1 per cent. Prices in Hillingdon also had a reasonable increase at 5.2 per cent.
Worst performing areas in London were in Southwark where prices dropped 7.2 per cent, Kingston upon Thames at minus 5. 9 per cent and Westminster with minus 4.8 per cent.
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