First-time buyers are shelling out nearly 8% over asking price to get their foot on the property ladder, according to new figures from estate agents Yopa.
While most buyers are haggling hard and securing discounts of over 21% on average, first-time buyers are breaking the bank, paying an eye-watering £245,208 for their first home – a whopping £17,638 above the average asking price of £227,570.
Experts say these rookies are coughing up extra cash due to a mix of desperation and limited supply. With years spent saving for a deposit, many first-timers are so eager to seal the deal they’re splashing out well over the odds.
Verona Frankish, Chief Executive of Yopa, says: “It’s great to see first-time buyers keen to get on the ladder to such an extent that they’re paying above and beyond the asking price. However, with this eagerness comes an element of risk.”
OVERSTRETCHED FINANCES
Frankish warns that inexperience and fierce competition can lead first-timers to overstretch their finances.
She adds: “There simply aren’t enough suitable first homes on the market, and so demand is high.”
Add 95% mortgages into the mix, and the stakes are even higher.
“These loans might make the market more accessible, but they also give buyers more money to pump into bids, leaving them with higher interest rates and tougher mortgages to manage,” she says.
SELLERS LOSING OUT
Meanwhile, the rest of the housing market tells a very different story. Overall, house hunters are bagging properties for well under asking price. The average British home is listed at £370,759 but is selling for just £291,828.
This contrast is partly down to a big jump in prices for ‘second-stepper’ homes. These properties have surged 2.1% in the past year, making them 51% pricier than first-time buyer homes. That’s forcing movers to drive a hard bargain – and sellers are losing out.
