Figures from the Office of National Statistics (ONS) show the price of homes for first time buyers have increased by 10.5% in the last year.

First time buyers have to have a higher income and deposit as house prices rise by 10.5% in February the highest in four years, although the rise for everyone else buying a property was lower at 8.5%.

The ONS have said the average house price is 9.1% higher in the last year at a record of £253,000.

First time buyers must now earn £47,000 for a mortgage £192,000 and have enough cash for a 20% deposit, equivalent to their gross annual income.

Help for first time buyers can come from family members as equity release buyers can access wealth using a lifetime mortgage and gift the deposit on a property to children or grandchildren.

Prices rising across the country

Average house prices were helped by the 17.7% rise in London but all areas are seeing some increases in house prices.

In England average prices in the last year are up 9.7% with the typical home now valued at £264,000.  Prices are now 5% higher than values recorded in 2008.

In Scotland prices are 2.4% higher with average prices at £183,000, Wales prices were up 5.3% with homes at £167,000 and Northern Ireland 2.8% higher and homes valued at £176,000.

Need for new-build homes

According to the housing charity Shelter, the government must be committed to building new homes to help slow down price rises in the property market.

If insufficient action is taken to new-build homes there will be a generation of young people and families priced out of the housing market and unable to buy a home.

Prices are expected to continue to rise by the end of 2014. The average UK property price is likely to rise from £250,000 in 2013 to closer to £270,000.

In London the average home will rise from £450,000 in 2013 to £510,000 making it even harder for first time buyers and home movers in our capital.

The lack of new homes could mean remortgage buyers staying in their current property and increasing their mortgage to releasing capital which they can use to make improvements.

What are your next steps?

Call our LCM mortgage brokers for advice if you are a first time buyer, want to remortgage your existing home for the best mortgage deal, moving home or are a buy-to-let investor.

For equity release buyers our London City Mortgage advisers can recommend lifetime mortgages allowing you to receive cash from your property for home improvements, holidays or even give to a family member.

Start with a free mortgage quote or call us and we can take your details. Learn more by using the property value tracker chart, mortgage cost calculator and equity release mortgage calculator.

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