FIRST-TIME buyers tend to be holding off taking their first step onto the property ladder, estate agents have said.

In October, house prices rose to record levels – with the average price of a home in Newport rising by £18,048 (8.3 per cent) in 12 months, according to land registry figures.

Interest rates sky-rocketed after Liz Truss announced her mini-budget in September, and the ongoing cost-of-living crisis and energy price rises have hit people's pockets.

One Newport estate agent told the Argus there had been a swing towards having more buyers than houses available after the pandemic.

They said some properties would have “20 to 25 people wanting viewings” the first day they were on the market.

However, since Liz Truss’ mini-budget, they said there was now “uncertainty in the market” – with first-time buyers holding off after the rise in interest rates.

An estate agent at M2 said those who were in two minds about buying were now holding off.

“We’re still busy with viewings but the people who were half-hearted before have now gone. It’s a quiet time of year anyway,” they said.

“There’s a lot of first-time buyers out there but the market is low.”

M2 told the Argus that – as of December 16 – the rate of a five year fixed term 95 per cent mortgage was 5.09 per cent.

This dropped to 4.94 per cent for a 90 per cent mortgage, and 4.55 per cent for a 75 per cent mortgage.

“The rates went up when Liz Truss made her announcement, but for the last few months they have been coming back down,” they said.

South Wales Argus:

Paul Broadhead, head of mortgage and housing policy at the Building Societies Association (BSA), told the PA News Agency that first-time buyers may have to “lower their ambitions” if they are looking to get on the ladder now.

“For first-time homebuyers, the rate rises are having an immediate impact as the higher cost of a mortgage, alongside the rising cost of living, will affect their overall affordability,” he said.

“Those taking their first step onto the housing ladder should therefore seek advice from a lender or mortgage broker, as they may need to lower their ambitions as they’re unlikely to be able to borrow at the level they might have achieved 12 months ago.

“Whilst we have not yet seen an increase in borrowers with mortgage arrears, we remain alert to the economic conditions, which are rapidly changing.

“Anyone who is worried about their finances and ability to pay their mortgage should therefore get in touch with their lender or a debt adviser as soon as possible.”