First time buyers paid more for a home in England and Wales in May

Taylor Scott International News

First time buyers in England and Wales paid an average of £173,282 to get on the housing ladder in May, a record high that fuelled by intense competition for properties. This was despite some uncertainty creeping into the housing market ahead of the referendum on the future of the UK in the European Union, according to the latest first time buyer tracker index from real estate agents Your Move and Reeds Rains. But transactions in the first time buyer sector were down by 0.8% compared to the previous month at 24,900 completed sales in May compared to 25,100 in April. However, the report points out that without a pre-referendum supply shortfall first time buyer numbers would have been even higher. The amount paid by first time buyers was up 2.7% from £168,656 in April and 15.8% more than the average of £149,645 seen in May 2015. First time buyer house prices have now increased by more than £23,000 in the last 12 months and current average prices paid are the highest on record. Across the market as a whole, house prices dipped in May in anticipation of the EU referendum on 23 June, with the latest Your Move House Price Index showing house prices in England and Wales fell 0.4% month on month in May. But the bottom of the market has defied this trend fuelled by unwavering first time buyer demand. The overarching trend remains strong, with first time buyer numbers some 13.2% higher than the 22,000 seen in February and 5.1% higher than a year ago. The tracker report also shows that the average mortgage rate for first time buyers slipped further in May to 3.08%, a new record low, following a fall of 0.37 percentage points over the past year. And while there is a climbing cost of purchasing a home, these cheaper rates mean mortgage repayments have not increased significantly as a proportion of first time buyer’s income. As of May, mortgage repayments accounted for 21.1% of income, just 1.7% more than a year ago. Meanwhile, the average first time buyer deposit currently sits at £27,669, up 12.8% or £3,146 from £24,523 a year ago. When compared to the average first time buyer income of £39,651, this represents an extra 29 days’ worth of salary. As a proportion of income, the average deposit has climbed 6.1% compared to May 2015. Taylor Scott International

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