Getting on the property ladder is proving harder than ever for first-time buyers with asking prices and rents for homes rising three times faster than pre-pandemic.
New analysis from Rightmove found asking prices for homes with two bedrooms or fewer – classed as first-time buyer type properties – are up 13 per cent since July 2020. That’s the equivalent of £17,500 higher on average – while they only rose by 4 per cent or £8,000 between July 2018 and 2020.
Rent rises also make it harder to save up for a deposit to buy a home. Record rent rises have seen the average monthly rental payments surge by 17 per cent or £128 per month in the last two years. That’s higher than the 14 per cent rise in earnings over the same period.
The scenario is locking more people out of the housing market despite the Conservative government’s vow to boost home ownership.
“For would-be first-time buyers who are trying to save up a deposit, they are chasing a fast-moving target as average asking prices for first-time buyer homes hit another new record, and rise more quickly than they did before the pandemic,” said Tim Bannister, Rightmove’s data expert.
“For those that aren’t able to live with parents or family members while saving, they also have to manage paying record rents both inside and outside of London.