Good news for sellers, but first-time buyers face a tougher battle as house prices rise for the second month in a row.

The dream of owning a home just got a little more distant for many, as house prices across the UK saw an 1.1% increase in the year to April. This means the average UK house price is now a hefty £281,000, according to the Office for National Statistics. This rise, up from 0.9% the previous month, follows eight months of falling prices and signals a potential shift in the market.

First-time buyers feeling the pinch

This increase is particularly tough on those trying to get their foot on the property ladder. These rising prices make it even harder for first-time buyers and those hoping to move up the property ladder.

New-builds driving the surge

Interestingly, the price surge is most obvious in new-build homes, which have seen a 15.3% increase. This contrasts sharply with a 1.3% decrease in prices for existing properties.

Renters feeling the squeeze too

And it’s not just buyers who are feeling the pressure. With house prices making homeownership a distant dream for many, more people are being forced to rent, pushing rental prices up too. Across the UK, rents have increased significantly:

• England: Rents up 8.6% to £1,301
• Wales: Rents up 8.5% to £736
• Scotland: Rents up 9.3% to £957
• Northern Ireland: Rents up 10.3%

The highest rent increases in England were in London (10.1%), while the North East saw the lowest rise at 6.1%. Looking across Great Britain, Kensington and Chelsea commanded the highest average rent at a staggering £3,397, while Dumfries and Galloway offered the most affordable rents at £480.

Politicians promise help, but is it enough?

Recognising the struggles faced by potential homebuyers, both Labour and the Conservatives have pledged initiatives to support them.

• Labour plans to make the Mortgage Guarantee Scheme permanent, allowing the government to back a portion of high-risk mortgages, making it easier for lenders to offer loans.
• The Conservatives, on the other hand, have promised to deliver 1.6 million new homes by 2029, outdoing Labour’s target of 1.5 million. This ambitious plan hinges on major changes to the planning system to boost construction.

Will new schemes really help?

However, experts caution against the potential downsides of such schemes, especially considering the already soaring prices of new-build homes. There are concerns that these schemes might unintentionally add fuel to the fire, further inflating prices.

The big question remains: will these initiatives be enough to bridge the gap for aspiring homeowners facing a market where prices continue to climb out of reach?