Property price inflation focused on first time buyers

First-time buyers continue to face double digit annual house price inflation.

Over the 12 months to November 2006, the average first-time buyer property value searched against on Moneyextra.com’s mortgage comparison tool rose by 14.05 per cent to £182,113 – that’s more than twice the rate of property price inflation across the whole housing market. It compares with a rise of just 6.27 per cent to an average £268,201 for those looking to move to a new home (which is actually down by a marginal £307 on October 2006).

The overall rate of increase in house prices in November 2006 was an annualised 6.7 per cent but the average amount being borrowed has risen by 8.8 per cent in the last 12 months. “House price inflation is being outpaced by the rate at which we’re going deeper into debt to afford the roof over our heads,” says Robin Amlôt of Moneyextra.com.

Once again, the brunt is being borne by first time buyers (FTBs) with the average amount borrowed by FTBs in November 2006 up by 9.9 per cent on year ago levels, compared to an increase in borrowing by home movers of just 7 per cent.

The average value of mortgages completed by AWD Moneyextra customers in November was £140,664.09. The overall average value of loans completed during the first 11 months of the year (Jan-Nov 06) was £141,895.00.