First time buyers the biggest victims in the current housing market

First time buyers (FTB) are the biggest victims of the current turbulence in the housing market.
According to the latest Rightmove asking price market report, FTBs are being hit with rising interest rates, continuing economic uncertainty and rising rents if they don’t buy.
Demand in the last two weeks dropped by 21% compared to the same two weeks last year, though it is 24% higher than 2019.
However, despite this, house prices are still rising and have done so nationally by 0.9% in the past month to a new record of £371,158. Stock shortages continue to be a major factor in the house price rises.
In the West Midlands, average house prices have risen to £288,808 which represents a monthly upward change of 0.4%, a year-on-year increase of 9.8%.
The vast majority of transactions are going ahead and typically property is taking 34 days to sell. Only 3.1% of sales agreed have fallen through in the two weeks since the mini-budget, which is in line with the 3.0% over the same two weeks during 2019
According to Rightmove’s figures, buyer demand is still 20% higher than the normal market of 2019 but it is down by 15% in the last two weeks compared with the same two weeks last year.
The fact prices are still rising suggests it will take time for any impact from interest rates and government policies to filter through to house prices.
There is also little sign of downwards price pressure on existing properties for sale, with the number of reductions up only 2% on last month to 23% – much lower than the pre-pandemic five-year average of 32%.
Rightmove suggests it is very likely asking prices will drop in November and December as they normally do.
Sheldon Bosley Knight’s head of residential sales and marketing, James Morton said: “It is encouraging to see house prices still on an upward curve as it means those selling are still getting a good return on their investment.
“That said, we are expecting to see a correction in the market in the next few months as a result of the cost of living crisis, lack of stock and the effects of the mini budget.
“What is concerning is how hard the first time buyers are being hit. Many may sit tight and continue to rent to save more for their deposit and hope interest rates fall or at least stabilise.
“As ever our trusted teams of sales experts are on hand to offer advice, help and support to those who want to sell or buy.”