Average price of an affordable house in UK is almost £190,000

The average price paid for listings by buyers using the affordable housing schemes in the UK has reached almost £190,000, new research shows.

The overall average price of £189,786 is just 4% or £7,750 lower than the £197,535 average for house purchases as a whole, the research from the Halifax shows.

Regionally, the highest average price paid by buyers using affordable housing schemes is in London at £323,148 while the lowest is in the North of England at £147,437. Nevertheless, the average value of a London listing sold in a scheme is 33% lower than the average London price of £482,579.

The research also shows that first time buyers remain the biggest beneficiaries of Help to Buy housing schemes accounting for 80% of purchases over the last year compared with 46% of all mortgage financed home purchases made by first time buyers over the same period.

In the last year, improving economic conditions and government schemes such as Help to Buy saw the highest number of first time buyers purchase their first home for seven years.

The latest official figures reveal that Help to Buy equity loans and mortgage guarantee schemes and NewBuy have helped 99,601 buyers acquire a home since the introduction of Help to Buy in the 2013 Budget. Four out five or 79,680 of these purchases were completed by first time buyers.

The average price paid by first time buyers using the schemes is now £150,361, some 10% or £16,732 lower than the average price paid by first time buyers for all housing which is £167,093.

First time buyers in London see the largest benefits from buying through affordable housing schemes, with an average price that is 36% lower than the average price paid by first time buyers in the capital generally at £236,733 compared to £367,961.

‘Many of the affordable home ownership schemes available have been designed specifically to help first time buyers get on the ladder and support construction of new build homes and the latest official figures show this has been successful,’ said Craig McKinlay, mortgages director at the Halifax.

‘As the economy continues to recover and mortgage interest rates remain at very low levels. We expect to see continued growth in first time buyers during the second half of the year,’ he added.

The research also looked at the profiles of borrowers buying a home under affordable housing schemes to find what typical scheme users are like. It found that 17% of affordable housing transactions in the 12 months to May 2015 were in Scotland followed by the South East at 15% and the North West at 10%.

By comparison, some 20% of all housing transactions were concentrated in the South East, and 12 % were in Scotland and 10% were in London.

The average gross annual income of a home buyer purchasing through an affordable housing scheme is £31,886, which is 5% lower than the average earnings for all those in full time employment at £33,475. Regionally, the average income of buyers under these schemes varies from £50,254 in London to £29,031 in North West.

Affordable housing schemes have particularly helped younger buyers, with 37% of all affordable home buyers in the age band 20 to 29, compared with just 25% of all housing transactions.

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Source: Property News Spain