This is reflected in the latest Zoopla House Price Index, which shows that the average first-time home purchase is £254,750.
The amount by which the average number of first-time homebuyers has risen in the past year is almost three times the overall growth in property prices in Britain, according to Zoopla. The number of typical homes for all buyers increased by 1.5% to £271,900.
Zoopla’s data comes from a report from the Mortgage Advice Bureau (MAB) which shows that first-time buyers could be able to access up to £40,000 more in mortgage loans this year than last year, thanks to easing affordability tests.
MAB’s report found that many potential buyers underestimate their borrowing potential. And Zoopla’s report also showed that despite first-time buyers spending more, there were also fewer.
According to the report, the combination of higher mortgage rates and increased uncertainty has led to a 6% drop in first-time buyer inquiries, with some taking a wait-and-see approach from the sidelines.
Yet those active in the market made no compromises and outside London, more than half of first-time buyer applications (53%) were for three-bedroom homes – the same as last year. The property mix is also unchanged in London: more than half of applications were for apartments.
The average house price for first-time buyers in the capital breached the £500,000 mark for the first time at £502,250 – this is £15,000 higher than last year, according to Zoopla.
It was the changes in the assessment of the affordability of mortgages that made houses more accessible to first-time buyers. And Zoopla’s data shows that they now account for more than a third of sales each year.
Zoopla’s report also showed that agreed sales were up 1% on last year, despite overall buyer demand being 10% lower than last year.
This is because browsers and browsers that are sensitive to higher borrowing costs have taken a step back. Meanwhile, buyers with a clear need to move have continued to make offers to purchase homes.
Richard Donnell, executive director of Zoopla, said: “We are in the peak months for homebuyers making offers and closing deals.
“Despite fewer buyer inquiries than last year, more sales are being agreed as dedicated movers forge ahead as mortgage rates fall.
“Many households are understandably cautious given the wider uncertainty. If you are considering moving, the most important step is to understand what is happening in your local market, rather than relying on national trends.
“It is important to seek advice from a local estate agent and for sellers in the South of England, getting the pricing right is the difference between moving and not moving this year.”