Data released from the ONS shows the cost of buying a home for first time buyers has increased by 11% over the year.
The Office of National Statistics (ONS) has released data showing the cost of buying a home for first time buyers has increased 11% over the last year to November 2014.
Average property prices for first time buyers have increased by £21,000 in the last year from £187,000 to the current level of £208,000. This makes it harder for first time buyers as they need a larger deposit to buy their first home.
For owner occupiers their homes increased by 9.5% year on year and the average price paid by a home mover increased to £312,000.
One advantage of rising house prices for homeowners is remortgage buyers can now release capital for home improvements.
Prices rising outside London
The ONS data shows some areas outside of London are experiencing a faster house price rise than London such as Northern Ireland.
The value of an average home in Northern Ireland have jumped by £10,000 in the last month as house prices year on year for last month was 4.9% higher and 11.7% to November 2014.
Across the country the ONS figures are as follows:
| Area | Change | Value |
|---|---|---|
| London | 15.3% | £501,000 |
| South East | 10.8% | £337,000 |
| East | 11.9% | £288,000 |
| England | 10.4% | £283,000 |
| UK | 10.4% | £271,000 |
| South West | 6.4% | £248,000 |
| West Midlands | 5.1% | £198,000 |
| Scotland | 4.4% | £194,000 |
| East Midlands | 7.8% | £188,000 |
| Yorks and the Humber | 5.3% | £178,000 |
| North West | 6.1% | £173,000 |
| Wales | 3.1% | £171,000 |
| North East | 5.9% | £155,000 |
| Northern Ireland | 11.7% | £147,000 |
For new build properties prices increased by 10.8% in November compared to 8.5% in October year on year. The average price paid for a new build property is £253,000.
This places more pressure on first time buyers using the government’s Help to Buy scheme as the price of buying a new build home has increased by £25,000 in the last year from £228,000 and requires a larger deposit from the homebuyer.
For home movers wanting to trade up when prices are rising, they may find their next property is more expensive which means they need a larger deposit or mortgage to buy their next property.
London prices are falling
In London average house prices reduced by £3,000 from October to November although year on year prices remain 15.3% or £66,000 higher. Property prices are slowing as this is less than the figure last month of 17.2%.
Prices have increased from £435,000 last year to £501,000 in November. However, the latest figure remains £13,000 than the average priced reached in August of £514,000.
Higher property values for older homeowners allows the equity release mortgage buyer to access wealth to repay an interest only mortgage or reduce inheritance tax owed by your beneficiaries.
The average house price in the UK increased by 10.0% compared to this time last year with the average price for a home now at £271,000. This is lower than the recent high figure of £271,000 achieved in August 2014.
What are your next steps?
Talk to our London City Mortgage advisers if you are an older homeowner releasing equity from your property, we can recommend the lifetime mortgage to access wealth for home or garden improvements and holidays.
Learn more by using the equity release mortgage calculator, property value tracker chart and mortgage cost calculator. Start with a free mortgage quote or call us and we can take your details.
At LCM our mortgage brokers can provide advice if you are a first time buyer, moving home, want to remortgage your existing home to a new cost effective mortgage deal or are a buy-to-let investor.
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