House price performance across the regions continue to vary, with the more expensive areas still struggling to return and Rightmove suggesting that they have seen some of the biggest falls in prices for 14 years – although to be fair, the most reported is a fall of 1.7%, which in the grand scheme of things isn’t really that much, so not too conclusive!

The North East and North West remain the two regions which are consistently seeing year on year rises across all regions, but the increases are lower than they have been in the past few months. The Midlands meanwhile is seeing little change year on year according to the indices.

First-time buyers are paying more

But as we all know there are lots different types of markets and probably the most interesting analysis from this months indices is Zooplas look at what First Time Buyers are paying in each region.

There research and conclusions shows that “Across the UK, FTBs are looking to buy homes priced at an average of £254,7502. This is 4.3% higher than a year ago and nearly three times the headline rate of UK house price growth.”

And paying more for properties isn’t what you would expect with rates as high as they are and it shows that despite many headlines still claiming first time buyers can’t get on the market, actually they can and they are paying more than other buyers to do so.

This is especially unusual bearing in mind they can only typically access repayment mortgages and are assessed at a long term mortgage rate, rather than the current mortgage rate, the latter of which is typically lower.

According to Zoopla:

“Despite higher mortgage costs, those first-time buyers who are still active in the market are looking to purchase homes worth around £255,000 on average – more than £10,000 (4.3%) higher than a year ago, significantly outpacing overall house price growth. In London, the average first-time buyer purchase has exceeded £500,000 for the first time, while in Scotland and the West Midlands buyers are targeting homes 8% and 7% more expensive than a year ago respectively.”

Importantly, first-time buyers are not compromising on the type of home they want. Outside London, more than half continue to search for three-bedroom houses, while in London the majority are still looking for flats.

In summary, they report:

“Although higher borrowing costs have reduced the number of first-time buyers entering the market, changes to mortgage affordability assessments have helped some buyers access larger loans. As a result, demand for entry-level homes remains strong, supporting prices and suggesting that waiting for significantly lower prices may not prove beneficial.”

Commentary from the indices on the regional performance

Rightmove

 – Prices have fallen across all southern England regions and Wales, while the more affordable northern areas such as the North East and Scotland are holding up better compared to this time last year.

Halifax

 – In England, stronger price growth remains concentrated in northern regions. The North East saw prices rise +3.1% over the year to £181,703, while the North West recorded annual growth of +3.0%, with the average home now costing £248,304.
 – By contrast, southern markets continue to see prices fall. The South East led declines, with prices down -2.1% year-on-year to £382,704, while London saw average values fall by -1.5% to £534,375.

Zoopla

 – In the North East, home sales are up 6% on last year despite buyer demand being 20% lower, the sharpest drop of any region. However there has been no increase in homes for sale, which means supply is being absorbed quickly – it explains above average price gains.
 – In London, sales agreed are up 8% on last year, the strongest of any region. This explains why house price inflation has stabilised after 6 consecutive months of modest price falls. However, with 13% more homes for sale than a year ago buyers still have plenty of choice and house price inflation is set to remain subdued.
 – For sellers in southern England pricing correctly is the difference between moving and not moving this year.