First-time buyers in the UK property market are facing a challenging environment to get on the ladder as the average asking price of properties favoured by them reached an all-time high of £224,963 in the past month, according to property portal Rightmove. This marks a 2% increase from a year ago, despite the fact that higher mortgage rates have made properties less accessible. Although the first-time buyer sector saw a 4% increase in agreed sales in March compared to four years earlier in March 2019, sales of higher-priced homes were still below the levels observed four years ago.

The report suggested that rising rents may be encouraging some first-time buyers to make the jump onto the property ladder, despite higher mortgage rates generally having pushed up borrowing costs. There have been signs of some lenders cutting mortgage rates though in recent months. The current display of “unseasonal pricing restraint” suggests that several new sellers are becoming mindful of the economic challenges, resulting in the shift of the housing market towards a more measured pace and conventional activity levels, similar to those observed in the pre-pandemic market of 2019.

The director of property science at Rightmove, Tim Bannister, said: “More competition amongst lenders in the smaller deposit, higher loan-to-value ranges is positive news for those would-be first-time buyers who have saved up their deposit and can still afford to move. However, it remains a challenging environment to get onto the ladder, with new record average asking prices and higher borrowing costs to budget for than a year ago.”

Karl Tatler, managing director at Wirral-based Karl Tatler Estate Agents, said: “The beginning of the spring market has been a real turning point, after a difficult start to the year and following the turbulence of the last three months of 2022. Listing figures are comparable with last year, while viewing figures are down only slightly, which given the exceptional market of last year is quite remarkable. The great news is that both buyers and sellers appear to have adapted and accepted the current economic and property market conditions.”

Overall, the property market in the UK has been seeing a more measured pace and conventional activity levels, similar to those observed in the pre-pandemic market of 2019. Buyers and sellers are adapting to the current economic and property market conditions, with more attractive fixed-rate mortgages available providing buyers with more confidence, and a noticeable increase in sales activity. However, the challenge for first-time buyers to get on the ladder remains high, with higher borrowing costs and record average asking prices. Visit Hana Capital for more details.