What can you buy for less than the average first-time buyer price of £224,000?

If you’re looking to buy your first home soon, you’ll probably be looking at average house prices in your chosen area.

Our monthly House Price Index shows what’s happening in the housing market on a national scale, including average asking prices. And right now, the average asking price for a first-time buyer-type home – that’s a home with two bedrooms or fewer – is £223,614. This has dropped since last month (-1%), and is slightly lower (-0.2%) than a year ago.

Why are house prices falling?

Mortgage rates are significantly higher now than they were at this time in 2022. This is because the Bank of England keeps raising interest rates in an attempt to bring down high levels of inflation.

Inflation has been falling recently, and we’ve seen average mortgage rates edge down consistently over the past six weeks. However, some home-sellers have been adjusting their asking price expectations due to the mortgage and interest rate rises, and during the traditionally quieter summer period in the housing market.

What’s happening in the first-time buyer market?

Despite some of these challenges, demand for first-time buyer homes has remained steady, and is even slightly higher (1%) than the same period in the more normal property market of 2019, before the pandemic began.

This is in part due to the competitive rental market, where tenant demand is 3% higher than even last year’s incredibly busy market, and asking rents are at a record high.

Our property expert, Tim Bannister, says: “With home sales holding up more strongly in the typical first-time buyer sector, the prospect of owning your own home remains an appealing option for those that can afford it, with the alternative being an extremely frenzied rental market, where rents are at record levels.”

Right now, the national average monthly rent outside London is £1,231. And that’s £38 higher than what you could expect your monthly mortgage repayments to be if you bought a property at the current average first-time buyer house price, with a 15% deposit, and opt for a 25-year mortgage term.

So, if you’re searching for a first-time buyer home right now, what sort of properties can you buy for around the average first-time buyer asking price? Take a look at some of the homes currently for sale below.

I’m looking to buy a home soon – what are my options?

If you’re getting ready to buy your first home soon, chances are you’ll be buying with a mortgage. A mortgage broker or adviser can talk through your specific circumstances to help determine the best lender for you, as well as explaining the type of mortgage that might be the best fit.

You can also keep an eye on the current average mortgage rates, which we track and update weekly. You can apply for a Mortgage in Principle online, which will give you an idea of how much you could borrow. It’s free, and your credit rating won’t be affected.

And we talk more about the recently launched Mortgage Charter here – put in place to give people who are struggling with their monthly mortgage repayments some clear and concise options.

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