House prices: average flat value jumps £75,000 in five years
New research has revealed that the average UK flat value has risen by £75,074 over the last five years, while the average price has increased by over £1,200 per month since 2013.
The average price of a flat increased from £157,061 in 2013 to £232,135 in 2018, up 48%, according to Halifax.
Despite the phenomenal rise in value of flats, the majority of property sales last year (six in ten) were for either terraced or semi-detached houses.
Over the same five-year period, terraced houses grew in value by £60,482 (41%) while semi-detached homes increased by £73,638 (27%).
Below, we look at what this means for first-time buyers hoping to get onto the property ladder.
Most popular types of property for first-time buyers
Terraced houses are the most popular property type among first-time buyers.
With an average price of £208,311, the cheapest of all the property types, terraced properties were bought by 37.3% of first-time buyers in the year ending March 2018.
Bungalows, which had an average price of £254,313, were the least popular property type. Only 3.4% of first-time buyers opted for one of these.
Most affordable areas for first-time buyers
Analysis by Which? using data from the ONS and the Land Registry revealed the most and least affordable areas for first-time buyers to live.
The most affordable areas for first-time buyers to get onto the property ladder were spread across Wales and the North West of England.
Copeland, Cumbria, came in as the most affordable area to live, where the average first-time buyer house price, £104,900, was 2.22 times the average annual salary.
The second-most-affordable area for first-time buyers was Blaenau Gwent in Wales, where the average first-time buyer house price stands at £79,439, 3.24 times the average salary.
Barrow-in-Furness, Cumbria, was the third most affordable area to live, with the average first-time buyer house costing £105,652, 3.29 times the average salary.
Least affordable areas for first-time buyers
The least affordable areas for first-time buyers were concentrated in London and the South East.
Kensington and Chelsea took top spot as the least affordable area to live. At £1.2m, the average first-time buyer house price in the London borough was equivalent to a staggering 22.54 times the average annual salary.
Second place went to Westminster, where the average first-time buyer paid £954,080, which is 22.54 times the average salary.
Hammersmith and Fulham came in third, with the average first-time buyer house price, £638,572, being 17.33 times the average salary.
First-time buyer mortgages
Getting a mortgage for a property can seem like a daunting task, especially if you’re buying in an expensive area.
As a general rule, lenders are allowed to loan up to four-and-a-half times the total income of you and anyone else you’re buying with.
This means that, in the current property market, workers in places such as London and the South East may have to look a bit further afield to buy their first home.
First-time buyers also have to save for a deposit of at least 5%, which can be challenging.
100% mortgages
If saving a deposit seems impossible, a 100% mortgage may be an appealing option.
There are two types of 100% mortgage on the market at the moment: guarantor mortgages and family deposit mortgages.
Both require financial backing from your family in order for you to secure the loan.
Kindly shared by Which?
