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Home Prices Surge as Demand for First-time Buyers in UK Increases

Posted by Jereco O. Paloma on Oct 20, 2015 06:10 AM EDT
Help To Buy Scheme Launched To Help First Time Buyers more big
NORTHAMPTON, ENGLAND - OCTOBER 08: Prime Minister David Cameron and mortgage advisor Helen Grigore (c) meet first time buyer Chris Gardner (r) during a visit to a NatWest Bank in Northampton, to launch the Government's 'Help to Buy' scheme on October 8, 2013 in Northampton, England. The scheme will enable eligible first time buyers who can afford only small deposits to buy a home with just a 5% deposit. (Photo : Rui Vieira - WPA Pool /Getty Images)

Home prices in the UK for this month has recorded a new record high as newbie homebuyers rush to their very own houses, a new report shows.

According to an article published by the Telegraph, citing a report from the realty website Rightmove, the average asking price for a typical house across the UK is now at £296,549 for this month or almost 6 percent against the same period of last year. What's interesting, the report added, that the 10 percent increase recorded in the demand for housing from first-time buyers.

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Mile Shipside, a housing analyst from the Rightmove, told the Telegraph the growth can be attributed to the significant increases in prices of houses ideal for first-time buyers. Shipside, however, said the rise in prices of homes that first-time buyers have to endure could be a direct result of scarcity on the availability of affordable houses that are within their price-range.  

"Despite tighter lending criteria in last year's Mortgage Market Review, some first-time buyers can still afford the higher prices being asked for by the sellers," Shipside was quoted as saying by Telegraph.

He added that there seems to be a competition between landlords and their potential first-time homebuyers, which in turn, creates a vicious cycle. Also, the scarcity of supply and the continued demand for houses makes it even more expensive either to rent or purchase a home.

A separate article from the Bloomberg, which cites a report from the Royal Institution of Chartered Surveyors increased, showed that a 6 percent growth rate in house prices has been forecasted all over London due to the significant disparity between the level of demand and the availability of supply.

It added that the 6 percent growth rate is double from last year's 3 percent. Additionally, it noted that the forecasted price of housing in London will be the highest for 15 consecutive years.

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