First-time buyer sales continue to climb

Tired couple with boxes moving into new home apartment

Sales to first-time buyers have continued to climb in the UK, with three in 10 transactions in March going to new purchasers.

This is up 4 percentage points from February, according to the National Association of Estate Agents (NAEA), with two-fifths (39 per cent) of estate agents expecting the buy-to-let stamp duty reforms to increase availability for FTBs – as BTL investors back away – further boosting sales for the group.

Indeed, more than a third (36 per cent) of estate agents argue sales to FTBs will pick up further, due to less competition for properties.

Last month, the supply of houses available to buyers soared by more than half (54 per cent) – from 35 properties available to buy per branch in February, to 54 in March. On the other hand, demand decreased last month, when agents reported an average 417 house hunters registered per member branch – down from 463 in February when demand for housing was at the highest level in 12 years.

In March, estate agents also reported a decrease in the number of properties selling for more than asking price. Only seven per cent of agents saw this happen in March, compared to 11 per cent in February.

Mark Hayward, managing director, National Association of Estate Agents (NAEA), comments: “The last few months FTBs have had to compete with landlords for the same properties and those landlords have really pushed hard to complete ahead of the rise in stamp duty. Now, in theory things should get easier for FTBs – as we have seen with a slight increase in sales this month – as those seeking to buy to let will tail off.”

“However in reality, it’s unlikely in the long term that FTB’s will notice a huge difference, as prices remain high and housing is in short supply,” he adds.

There is light at the end of the tunnel – but the tunnel remains a long one.

UK first time buyers remain resilient

5th April

First-time buyers remain resilient in the UK, with the number of first-time buyer sales growing in February 2016.

The number of households purchasing their first home grew by almost 7 per cent in February 2016 year-on-year, according to new report from Your Move & Reeds Rains.

The total monthly volume of first-time buyer transactions reached 21,100, a rise of 6.6 pe rcent on February 2015’s figure of 19,800. The month saw a slight seasonal dip, with the number of completed first-time buyer property transactions falling by 300 – or 1.4 per cent – between January and February, but on a seasonally-adjusted basis, February’s figure is considerably higher at 25,900 – just 500 below January 2016’s seasonally adjusted total of 26,400.

“February is a traditionally quiet period for the first-time buyer market,” comments Adrian Gill, director of estate agents Your Move and Reeds Rains. “The month sits awkwardly between the New Year property market rush and the spring-summer activity high. However, beyond that seasonality, these figures demonstrate the strong, steady underlying growth that comes with growing first-time buyer confidence.

“This optimism may begin to reveal itself more clearly [with March’s figures], when an Easter uplift may sweep away any residual doubts among some first-timers. While the more general mismatch between buyers and sellers will continue to exert upwards pressure on prices, a combination of pluck and poise from first-time buyers will ensure that this does little to impact the overall trend of growing demand at this end of the market.”

As well as a rise in confidence, the costs of buying and owning a home have also remained broadly stable, notes the estate agents, with lower borrowing costs balancing out larger prices and deposits. Indeed, average mortgage rates for first-time buyers have improved, down 0.56 percentage points on a 12-month basis and by a much slighter 0.03 percentage points between January and February 2016. February’s average mortgage rate also represents the lowest mortgage rate for first-time buyers in over five years.

Homeownership becomes more affordable in UK

14th December 2015

Homeownership is becoming increasingly affordable in the UK, as deposits, prices and mortgage costs all fall.

Raising a deposit – the single biggest barrier to potential homeowners since 2010 – is now at its lowest level for six years, according to the latest report from the BSA.

It still presents a barrier to over half of consumers with 52 per cent saying it is a hurdle to overcome, although this is also down from 59 per cent in September 2015 and the high of 69 per cent in September 2011.

From September to December 2015, access to mortgage finance as a barrier to home ownership has also dropped from 41 per cent to 38 per cent. The affordability of monthly mortgage repayments fell from 35 per cent to 33 per cent and lack of job security is now at 26 per cent, down from 28 per cent.

The results indicate that people are feeling reasonably confident about home ownership as an option for them. This could partially be as a result of the focus on housing in the Autumn Statement in November and is evidenced by the strong lending by building societies and other lenders across the market this year.

Commenting on the results, Paul Broadhead, BSA Head of Mortgage Policy says: “This snapshot of sentiment in the housing market shows that consumers are feeling reasonably optimistic about getting on or moving up the property ladder. Awareness of Government schemes, such as Help to Buy and the new Help to Buy, London plus the availability of higher loan-to-value mortgages helps to bring choice and competition to the market.”

The figures are backed up by new research from Santander, which shows that buying is now cheaper for first-time buyers in every region of the UK.

According to the bank’s research, would-be buyers could save themselves £2,300 a year if they were able to purchase their own property. The average monthly rent in the UK is currently £995 per household compared to monthly repayments of £805 for the average first-time buyer household, meaning homeowners could save an average of £190 a month or £2,3005 a year.

Miguel Sard Managing Director of Mortgages, Santander UK, adds: “People assume that buying a property will put them under greater financial pressure, but often the reverse is true. With annual savings averaging well over £2,000, this can really mount up over time and of course once the mortgage is paid off you have a valuable asset to show for it.

“Many prospective first-time buyers see the cost of saving for a deposit as prohibitive, but there are many deals available for smaller deposits. Buying a property is a big financial commitment and there are upfront costs to consider, but over the long-term the financial benefits can be very significant.”