The updated house price index for the UK reveals a general further increase in house prices, with still no government support for first time buyers in sight
In England, the average house price for first time buyers has increased by 7.7% since this time last year.
This contributes to an overall rise in 1.1% in all areas, and an annual rise of 6.4%, bringing the average property value in the UK to £271,000. This places average first time buyer prices at just £21,000 cheaper than most houses.
The North East of England saw the largest rise in a year
Rising up to £168,000 (14.3%), the North East saw the largest jump in price, followed by Yorkshire and the Humber at £211,000 (9.5%) and the North West at £217,000 (9.4%).
The most expensive region to buy a home is, unsurprisingly, London, which has risen its average price by 0.8% to £552,000.
The average mortgage price in the House Price Index March 2025 sits at £301,000, a rise of 7.1% from last year.
New builds currently dominate prices in England over existing resold property. As of January 2025, the average price for new builds is at £416,000 (17.4% up from last year), while existing resold property sits at £285,000 (3.6%).
Wales currently has the best deal for first-time buyers as the average price sits at £180,000, a rise of 4.6%, while former owner occupier is averaged at £247,000, a rise of 2.4%.
The UK HPI can be read in full here.
Higher prices means fewer housebuilding opportunities
As the average house price continues to rise and average wages struggle to even begin keeping up, more and more people are locked out from purchasing a home.
This means that homes become harder to sell, and in turn, housing developments are harder to turn a profit on, meaning lower profits for housebuilders and fewer funds for the next development, as well as hiring new staff, apprentices, etc.
Several voices in the industry have repeatedly called for support for first time buyers to help more young people buy their first home, boosting the ability to meet housing supply and providing more money across the housebuilding sector. The Home Builders Federation say this would especially benefit SMEs, who often build homes tailored to first time buyers.
The National Federation of Builders have also called for more support, with Richard Beresford, chief executive of the National Federation of Builders (NFB), saying: “First time buyer lending schemes are absolutely vital to buyers and builders, but without a huge increase in supply, there is a risk that buyers overpay for homes. This is why Labour’s commitment to 300,000 homes a year is so important.
“Demand led policies that are unsupported by supply strategies create unintended consequences, such as fuelling house price rises and risking negative equity on certain home types, like apartments, because premiums were paid to get on the housing ladder rather than to purchase the appropriate homes.”
Average house prices are suppressing demand, and harming housebuilding
Earlier this month, the Home Builders Federation published a report titled Saving the British Dream.
The report examines the issue of young people being unable to afford a home, and found an alarmingly low 10.4% of 20-44 year olds that do not already own a home, are financially sound enough to buy a first home.
The report also emphasises the fact that many of these young adults can only afford a home due to being able to pool funds together with a partner, and that roughly only 2.9% of this 10.4% can afford a home on their own.
This still leaves 89% of people in this age range who do not already own a home being unable to afford one.
Issues causing this include lack of savings for a deposit, being unable to borrow the required amount (with average first time buyer house prices still increasing as per above), salary increases not matching inflation, or not being able to meet affordability criteria.
First time buyer demand is at 350,000 homes, but with the number of young people able to afford these homes, just 69,000 would be sold over the next five years.
The HBF have proposed a scheme for first time buyers to fill the void left since the ending of the Help-to-Buy scheme.
