First-time-buyers scrambling to get on the property ladder are being faced with mammoth house price rises and intense competition, with 11 buyers chasing every new property to come onto the market.
Research from haart has shown that the number doubles to 20 to 1 in London and the estate agent said that the average price of a first-time buyer home increased £4,150 in June – an increase of £138 every day and up £12,000 over the last 12 months.
First-time buyers are now paying £166,393 for their first home, up 7.6% on last year, while the average deposit rose to £32,518, up 3.2%.
Paul Smith, chief executive at haart, said: "A potential first-time buyer on an average salary of £27,000 must be prepared to spend 42% of their take home salary on mortgage repayments, showing the traditional rule of spending no more than 30% of income on housing is no longer reality for many."
The number of first-time buyer registrations fell 13.6% in the UK last month and 17.3% in London, suggesting high prices are stifling demand, Smith added. Adding upward pressure on house prices is the fact that the supply of properties in the UK is down 13.9% in the year to June.
The average UK property price has increased 6.1% over the past year to stand at £216,951.
"The only solution to this is to unlock the market and free up supply. Efficient use of space is a must and we need to dispel fears that downsizing indicates older home owners have lost their zest for life. Movement in the upper echelons of the market will free up stock at all levels and put the brakes slightly on property price growth," Smith said.
The government's recent announcement in July's emergency Budget that the inheritance tax threshold is to be raised to £1m and that an inheritance tax credit will be implemented could encourage those with larger, more expensive homes to downsize.
"This should have a trickle-down effect and boost the supply of starter homes at the lower end of the market, helping first-time buyers."
A new All-Party Parliamentary Group for Housing and Planning to address the national housing emergency, chaired by Tory MP James Cartlidge, has been tasked with recommending solutions to reshape the housing market.