According to new statistics from estate brokers Yopa, who compared average asking prices to average sold prices for houses for first-time buyers, first-time buyers are spending over 8% more than the asking price to obtain their first home.
According to Rightmove, the average asking price for a home purchased by a first-time buyer in the UK is £227,570. However, the UK House Price Index indicates that the average price at which a home sold to a first-time buyer was £245,208, which is 7.8% more than the asking price.
This is despite the fact that first-time buyers present a great prospect for vendors as they have nothing to sell and there’s no chance of a collapsing chain scuppering the sale. The figures suggest there’s a scarcity of first-time buyer properties compared to the rest of the market — and plenty of competition.
“These findings highlight the challenges first-time buyers are facing in today’s highly competitive housing market. On average, buyers are paying an additional £17,638 to secure their first home, which reflects the strong demand for more affordable homes and the pressure inexperienced buyers may feel to offer more,” explains Jonathan Bone, Head of Mortgages at Better.co.uk.
“This emphasises the critical importance of financial preparation and strategic planning for those looking to get on the real estate ladder.”
Where London first-time buyers are moving to
In London, a first-time buyer pays more than double that of the national average; the data found that a starter home in the capital comes in at an average of £506,706.
In terms of where London first-time buyers are purchasing in 2024, Better.co.uk had 85 first-time buyer mortgage applications for Tower Hamlets and Hackney, with a median deposit of £70,500 and a median value of 435,000; 77 applications for Westminster, Kensington and Chelsea, with a median deposit of £95,750 and a median property value of £500,000; and 71 applications from first-time buyers in Southwark where the median deposit was £72,643 and the median property value £401,000.
How to get an offer accepted without overpaying
1. Organise an Agreement In Principle
An agreement in principle is a document from a mortgage lender confirming how much they can lend you, based on financial considerations such as your salary and deposit.
“It can strengthen your position as a first-time buyer because sellers are more likely to take your offer seriously if you have this conditional approval in place… An AIP helps give you a competitive edge, especially in a challenging property market where sellers may receive multiple offers,” says Bone.
2. Be flexible on dates
Being a first-time buyer comes with the huge advantage that you aren’t in a chain. This means that you are more likely to be flexible on exchange and completion dates.
If a vendor wants to sell quickly or hasn’t had a chance to find their next property, this flexibility is something they will appreciate and could give you the edge over other offers who are in chains and constrained by timings out of their control.
3. Start with your best offer
First-time buyers often think that they need to put in several offers before securing a property, but you might end up paying more in the long run – or even losing out.
“Consider making your best and highest offer first, if you want to avoid a lengthy negotiation process and reduce the risk of another buyer pipping you to the post. This is another effective way of showing the seller you are serious and financially prepared, which can help make your offer stand out. It also prevents the need for back-and-forth negotiations, which can sometimes lead to losing the property to another buyer,” says Bone.
4. Write a personalised cover letter
While buying a house can feel very transactional, a personal touch does help. Along with your offer, consider writing a letter about who you are and what you like about the property.
“Sending a personalised cover letter can help set you apart from other buyers. While the decision ultimately depends on the seller, it’s important to remember that putting a property up for sale is a significant event for people, as it might have a lot of sentiment and memories attached to it,” says Bone.
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