House prices hit new highs this month as first-time buyers scramble to get their foot on the housing ladder, according to property website Rightmove.
Average asking prices rose to £296,549 in October, 5.6pc higher than they were a year ago. Especially strong demand from first-time buyers has seen the price of properties bought by those getting on the housing ladder jump by close to 10pc in the period.
Miles Shipside, a Rightmove housing analyst, said that the growth in average house prices was “mainly being fuelled by the heady price rises of typical first-time-buyer homes”.
“Despite tighter lending criteria in last year’s Mortgage Market Review, some first-time buyers can still afford the higher prices being asked for by sellers,” he said.
Rightmove said that the higher costs faced by first-time buyers were symptomatic of a shortage of small properties, and increased demand from buy-to-let landlords investing in response to a significant need for rented accommodation.
Competition between budding first-time home purchasers and landlords had created a “vicious circle”, the property website said. Housing scarcity has made it increasingly costly to live, either by owning or renting a home.
Many letting agents reported a high volume of “same day” rentals, as available properties were quickly snapped up, as there is little or no property available to rent. Rightmove said that a growing number are attracted to the “transience” of renting, without the commitment and hassle of buying and selling a property.
“With local authorities, housing associations and developers no longer satisfying the country’s housing needs, those in particular looking to rent or buy smaller homes must hope for the cavalry to come to their rescue,” said Mr Shipside.
“In the meantime, it seems the army of privateer buy-to-let investors remains the only short to medium term way to scale up our rental capacity.”