The UK housing market is in no way welcoming to first-time buyers, as the price of houses increases by 1.1 per cent in the year to April 2024. At this rate, the average house price is now positioned at 281,000 British Pounds, sending worse prospects for people with an appetite to enter the property market.
The 1.1 per cent increase in average house prices followed a 0.9 per cent rise in March, the second consecutive month of annual price growth following eight months of decline, according to the Office for National Statistics. Average private rents rose by 8.7 per cent in May, a slight drop from 8.9 per cent in the previous month.
Across the 12 months to April 2024, average house prices in England increased to £298,000, reflecting a 0.6 per cent annual rise. In Wales, prices went up to £208,000, a rise of 0.4 per cent, while Scotland saw prices go up by 4.5 per cent to £190,000. In Northern Ireland, there was an annual rise of 4 per cent to £178,000.
The rent market also has the same tinge of stress on housing affordability. The average rents in England went up by 8.6 per cent to £1,301, while that for Wales and Scotland increased by 8.5 per cent to £736 and by 9.3 per cent to £957, respectively. The nation having the highest rent inflation was Northern Ireland with a year-on-year rise in average rents of 10.3 per cent in March. Within England itself, London saw the highest at 10.1 per cent, as against the North East that notched up the lowest at 6.1 per cent. Across Great Britain, Kensington and Chelsea had the highest average rent at £3,397, while Dumfries and Galloway had the lowest at £480.
Anna Clare Harper, head of sustainable investment adviser GreenResi, stated house prices have increased by 1.1 per cent to £281,000, but for most younger people this number in isolation meant very little. The important question for the under-40s is whether decent housing is affordable, and as Harper said, it depends more on regulation than it does on house prices.
First-time buyer initiatives have been put forward by both main UK political parties. Labour intends to make the Mortgage Guarantee Scheme permanent. Under the scheme, which was announced by the previous government, lenders pay a fee in return for the government underwriting the riskiest part of a mortgage. In contrast, the Conservatives take aim at delivering 1.6 million new homes by 2029, more than Labour’s commitment of 1.5 million over the same period. These targets would require at least 300,000 new homes to be built in England alone every year, needing huge reforms in the planning system.
However, if not done properly, new schemes could just further postpone the event. New-build prices are going through the roof and are rising far more quickly than existing homes.
With the constantly changing UK housing market, opportunities for first-time buyers and renters do not cut the mustard. Against the backdrop of political initiative promises and market dynamics, the future of affordable housing would assume centre stage in the UK for many.