There have been numerous reports out this week showing that first time buyers have seen a steep rise in property prices.
Rightmove have stated that the average asking price for a first time buyer property (with 2 or less bedrooms) has risen by 3% during September. In contrast to this figure, the annual verage price growth across all property types in the UK is currently sitting at 4%.
Smaller homes that are suitable for first time buyers have increased in price by 10.5% in the last 12 months. These drastic rises are in part to do with the surge of buy to let investors, who acted quickly to snap up properties before the 3% stamp duty rise in April this year, leading to a big drop in supply.
The price of an average home listed on the market in September has risen by around 0.7%, this has been the first rise since this year’s referendum, where prices fell by 2%.
Another report by Legal & General has found substantial evidence that the housing crisis is driving generations apart. Research conducted by the Intergenerational Foundation, has highlighted that rural areas have aged twice as fast as urban ones in the last 25 years, and because of this, the UK is becoming more segregated by age.
Cities like Cardiff and Brighton have been listed as the most segregated cities by age in England and Wales, partly due to their larger student populations.
The main reason for this is the lack of smaller homes available for older people to downsize into, which is causing prices to surge. Younger people are increasingly living in city centres, unable to buy their first property in the suburbs because of the higher prices.
In summary it appears we are creating an intergenerationally unfair society, bold steps need to be taken to reverse some of these trends that have emerged as a result of this housing crisis. This will involve an increase of 100,000 affordable new homes a year, but also more investment in modern infrastructure and modern industries to create the jobs needed for the future.