House prices dropped 0.7% in October, the Nationwide said yesterday, whilst a simultaneous report from the Land Registry covering September showed house prices slipped 0.2% last month.

According to Nationwide, this month’s fall, which brings the average house price down to £164,381, accelerates the decline of the last three months to 1.5%.

The Nationwide average price was remarkably close to the Land Registry price quoted for September, of £166,767.

The Land Registry also reported its latest date on transaction levels, showing that between April and July there was an average of 57,152 sales per month – up from the 50,865 sales for the same period last year.

The figure is, however, still a long way from the long-term norm of 80,000 sales a month.

But more house price falls could be exactly what first-time buyers need.



According to another report out, the average first-time buyer would have to save every single penny of their earnings for more than two years to have any chance of getting a foot on the housing ladder. In London it would take three years.
 


Even over five years, young people have to save almost half of their take-home pay every month to save a deposit for a house, with some areas even more.
 


The report by the Home Builders Federation, entitled ‘Broken Ladder’, identifies the increasing lack of affordability in the housing market at a time when supply is critically low – last year saw the lowest number of homes built since 1924 – and mortgage availability almost non-existent.
 
The shocking figures reveal that on average, FTBs in their twenties would have to save 45% of their net income every month for five years to afford a deposit for the average starter home.

In London and the South-East the figure is even higher, with young people in the capital needing to save 60% of their net income to get on the housing ladder.
 


This means that even if a person in their twenties were to save every penny for 27 months, they still wouldn’t be able to afford a deposit. In London it is 35 months.
 
Because of this, the average age of the unassisted FTB has rocketed to 37, with even those on higher wages in their thirties struggling to buy.

This has resulted in more and more people being forced to stay with their parents, with nearly a third of men and a fifth of women aged 20–34 now still living at home.


The report also reveals that FTBs aged between 22–29, who are privately renting while saving for a deposit, will have just 13% of their monthly net income remaining for council tax, bills and living expenses – for five years.
 


Stewart Baseley, chairman of the Home Builders Federation, said: “These figures reveal the extent of our housing crisis. First-time buyers, who are the life-blood of the housing market, are almost entirely shut out. The lack of mortgage availability is further strangling a market already choking on a lack of supply. We desperately need an increase in lending and a properly functioning and sustainable mortgage market.


“At the same time, the Government must ensure that the new planning policy and incentives they are basing the success of their housing plans on are put in place immediately. Without more houses and more mortgages, young families will be unable to have the security of a roof over their heads and the housing crisis will very quickly reach the point of no return.”

Article source Estate Agent Today