First-time buyers are frozen out
HOUSE prices are rising by an average of £435 a week, making it harder than ever for first-time buyers to get on the property ladder, it has emerged.
Mortgage lenders warned that the problems facing new buyers in the South - where couples must find cash deposits of at least £22,000 - are rapidly spreading across the country.
Without first-time buyers, the market risks stagnation. The lack of new buyers - Britain's biggest mortgage lender, the Halifax, says they have fallen to a record low - means homeowners seeking to trade up will find it harder to get buyers for the properties they wish to leave.
A spokesman for the bank, which published the monthly price figures, said: 'The biggest impact on house prices will be first-time buyers. They are the crucial part of the jigsaw and we need to see that picking up. The shortage of first-time buyers will have an impact next year on the housing market and that will slow it down.'
Halifax chief economist Martin Ellis said:'We expect the rate of house price growth to slow gradually over 2003 and into 2004 as the rapid increase in house prices in regions outside Southern England over the past year or so make it increasingly difficult for first-time buyers, in particular, in these parts of the country to get a foot on the housing ladder.
'Accordingly, we are likely to see a more even pace of house price growth across the regions in 2004 than in recent years.'
The Halifax recorded a 1.3% price rise during August, fuelled by low unemployment and interest rates. It said prices had increased by an average of 1.1% over the last three months, nearly double the 0.6% monthly average of the past 20 years.
The last 12 months have seen prices soar by 19.1%, taking the average price of a property from £111,283 to £133,908 - more than five times the average salary.
The Halifax estimates first-time buyers can expect to pay around £103,294 for a home. It predicts price growth will slow to around 5% in 2004 as the shortage of new buyers makes an impact.
However, there are still areas where youngsters can get on the property ladder. These include Warrington, Crewe, Mansfield and Wrexham, mortgage broker the Mortgage Advice Bureau said.
