First-time buyers pay over the odds for homes

First-time buyers are shelling out nearly 8% more than the asking price for their first homes, an analysis reveals.

The findings from estate agent Yopa compared average asking prices to average sold prices for first-time buyer homes.

It shows that inexperienced buyers are going to significant lengths to secure their first property.

While the average asking price for a first-time buyer home in Britain stands at £227,570, buyers are ultimately paying an average of £245,208, a premium of 7.8%.

Paying above and beyond

Yopa’s chief executive, Verona Frankish, said: “It’s great to see first-time buyers keen to get on the ladder to such an extent that they’re paying above and beyond the asking price.

“However, with this eagerness comes an element of risk.

“First-time buyers are, understandably, in the dark when it comes to buying property, and because they’re so determined to make a purchase, they can easily end up offering higher prices.”

She added: “This can also happen due to the fact that there simply aren’t enough suitable first homes on the market and so demand is high.”

Buyers are negotiating lower prices

This trend contrasts sharply with the wider British market, where buyers are negotiating lower prices.

The average asking price for all homes is £370,759, while the average sold price is £291,828, a 21.3% reduction.

Yopa says that the average price of a first home has increased by just 0.9% in the past year, while second-stepper homes have risen by 2.1%.

The increase means that second-stepper homes are now 51% dearer than first-time buyer homes.

It also suggests, the agency says, why sellers outside of the first-time buyer market are struggling to achieve their asking price.