It doesn’t matter whether you are planning to buy your first home or to move into a new rental, the chances are that if you are making your move this autumn, you will be paying higher prices than you would have done a couple of years ago. Both rents and the costs of starter homes have hit new highs, leaving many tenants wondering which of the options for their next move will make the most financial sense.
The average amount spent by first time buyers has reached its highest point for two years, according to estate agency haart. The average cost of a first home is now over £160,000. The market is particularly difficult for first time buyers at the moment. Although the property market as a whole has experienced growth this year, the impact has been strongest for starter homes. In September, the average price for all properties actually dropped by 1.1%, but the average cost of a starter home rose by 4.1% in the same month. While the overall growth is now beginning to slow down, starter homes are still becoming more expensive, and there is more competition between first time buyers than in other parts of the market. However, with the numbers of prospective first time buyers registering with estate agents on decline, the situation might become a little better as the competition for starter homes is reduced.
If these higher prices are enough to put you off buying for the moment, you won’t find much relief in the rental market. According to LSL Property Services, rents have also been on the rise recently. The average monthly rent in England and Wales has reached £768. However, the future could be looking a little brighter for tenants, since the rate at which rents are increasing has been showing signs of slowing down, as often happens at this time of year. In August, rents rose by about 2.4% on average, but the rise slowed to 1.5% in the following month. This slower growth is expected to continue into the next year, with an expected average monthly increase of 1.8% in the next 12 months.