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House prices: average flat value jumps £75,000 in five years

The average price of a flat has increased by over £1,200 per month since 2013

New research has revealed that the average UK flat price has risen by £75,074 over the last five years.

The average price of a flat increased from £157,061 in 2013 to £232,135 in 2018, up 48%, according to Halifax.

Despite the phenomenal rise in value of flats, the majority of property sales last year (six in ten) were for either terraced or semi-detached houses.

Over the same five-year period, terraced houses grew in value by £60,482 (41%) while semi-detached homes increased by £73,638 (27%).

Below, we look at what this means for first-time buyers hoping to get onto the property ladder.

  • Whether you’re looking for a flat or a mansion, Which? Mortgage Advisers can recommend the best mortgage for you. Call them for a free chat on 0800 2942 849.

Most popular types of property for first-time buyers

Terraced houses are the most popular property type among first-time buyers.

With an average price of £208,311, the cheapest of all the property types, terraced properties were bought by 37.3% of first-time buyers in the year ending March 2018.

Bungalows, which had an average price of £254,313, were the least popular property type. Only 3.4% of first-time buyers opted for one of these.

The graphic below shows the most popular property types bought by first-time buyers and the average cost.

Most affordable areas for first-time buyers

Analysis by Which? using data from the ONS and the Land Registry revealed the most and least affordable areas for first-time buyers to live.

The most affordable areas for first-time buyers to get onto the property ladder were spread across Wales and the North West of England.

Copeland, Cumbria, came in as the most affordable area to live, where the average first-time buyer house price, £104,900, was 2.22 times the average annual salary.

The second-most-affordable area for first-time buyers was Blaenau Gwent in Wales, where the average first-time buyer house price stands at £79,439, 3.24 times the average salary.

Barrow-in-Furness, Cumbria, was the third most affordable area to live, with the average first-time buyer house costing £105,652, 3.29 times the average salary.

Least affordable areas for first-time buyers

The least affordable areas for first-time buyers were concentrated in London and the South East.

Kensington and Chelsea took top spot as the least affordable area to live. At £1.2m, the average first-time buyer house price in the London borough was equivalent to a staggering 22.54 times the average annual salary.

Second place went to Westminster, where the average first-time buyer paid £954,080, which is 22.54 times the average salary.

Hammersmith and Fulham came in third, with the average first-time buyer house price, £638,572, being 17.33 times the average salary.

First-time buyer mortgages

Getting a mortgage for a property can seem like a daunting task, especially if you’re buying in an expensive area.

As a general rule, lenders are allowed to loan up to four-and-a-half times the total income of you and anyone else you’re buying with.

This means that, in the current property market, workers in places such as London and the South East may have to look a bit further afield to buy their first home.

First-time buyers also have to save for a deposit of at least 5%, which can be challenging.

100% mortgages

If saving a deposit seems impossible, a 100% mortgage may be an appealing option.

There are two types of 100% mortgage on the market at the moment: guarantor mortgages and family deposit mortgages.

Both require financial backing from your family in order for you to secure the loan.

Finding the best mortgage deal

It’s important to work out exactly what you can afford before you start looking for a mortgage.

Using tools such as a mortgage repayment calculator can help you determine what your repayments would be at different rates.

Once you’ve got your figure in mind, make sure you shop around and don’t just go for what seems like the cheapest option, as it may not be suitable in the long term.

Getting independent advice from a mortgage broker can also help you to make a plan and determine which deals are best for you.

Whether you’re a first-time buyer or looking to move home, our impartial mortgage brokers at Which? Mortgage Advisers can offer guidance on how to get the best mortgage deal.

For a free consultation, call 0808 252 7987 or fill in the form below to get a free call back.

Your home may be repossessed if you do not keep up repayments on your mortgage.

Which? Limited is an Introducer Appointed Representative of Which? Financial Services Limited, which is authorised and regulated by the Financial Conduct Authority (FRN 527029). Which? Mortgage Advisers and Which? Money Compare are trading names of Which? Financial Services Limited.

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