House prices rising out of reach of first-time buyers

FEWER than one in ten electoral wards in the South West have an average house price below £200,000, analysis has found.

This makes life tougher for firsttime buyers, as the average price of a first home across England and Wales is only slightly below the £200,000 mark, according to estate agent Savills, which carried out the research.

Ten years ago, more than half (53%) of electoral wards across England and Wales had an average house price below £200,000, according to the findings.

The percentage has now fallen to 29%, down from 44% five years ago.

Savills produced the findings by analysing Office for National Statistics (ONS) local house price data.

It said Nationwide Building Society has previously put the average price paid by a first-time buyer in the

UK at £196,223.

The proportion of wards where the average house price is more than £500,000 has gone from just under 3% in 2010 to more than 11% in the past decade.

Twenty years ago, the proportion barely registered, at just 0.2% or 13 wards, Savills said.

High-value locations are heavily concentrated in London and the South East of England, but demand for housing in the Westcountry has soared over the last year, pushing up prices.

Average prices exceeded £500,000 in more than half (54%) of electoral wards in London at the end of September, 2020, and just under a quarter (24%) in the South East.

Ilford Town in Redbridge was the only London ward where the average house price was below £250,000, at £244,892. This was out of more than 600 electoral wards across the capital, according to Savills’ research.

Lucian Cook, head of UK residential research at Savills, said of the findings: “This doesn’t create issues for existing home owners and those looking to trade up the housing ladder, given both the amount of equity they have in their home and the low cost of debt on their mortgage.

“But it will continue to present a significant barrier to prospective first-time buyers, unless the recently announced mortgage guarantee scheme or other initiatives unlock significantly more competitive mortgage finance for those struggling to raise a deposit.”

A string of banks recently launched new 5% deposit mortgages onto the market, as part of a Government-backed scheme to help boost first-time buyers.

The following are the percentages of electoral wards where the average house price is below £200,000, in September 2015 and followed by September 2020, according to Savills: London, 0%, 0%; South East, 12%, 2%; East of England, 24%, 7%; South West, 27%, 8%; West Midlands, 57%, 37%; East Midlands, 64%, 39%; Yorkshire and the Humber, 66%, 51%; North West, 73%, 58%; North East, 85%, 78%; Wales, 77%, 63%.

‘This doesn’t create issues for existing home owners and those looking to trade up the housing ladder’