Despite low numbers of houses currently available on the market (approximately the same as in May 2004, according to recent reports), the number of first time buyer is rising. According to the latest Housing Market Report from the National Association of Estate Agents (NAEA) the percentage of homes sold by members in February to first time buyers has increased to 29%, an almost unprecedentedly high figure. Against this, though, the average number of properties sold has remained largely static, meaning that the numbers of houses currently changing hands has dropped, as of course first time buyers are not also selling a house. High uptake from first time buyers has the overall result of reducing available housing stock. Help to Buy deals have not changed, however, remaining at around 4% of the total.
An interesting demographic
The largest group – almost half of the total – are in the 31-40 age group, bearing out recent news reporting of the boomerang generation, those who have gone back to parents after education while they save for a deposit. Almost a quarter of sales were to people relocating, which suggests a more fluid job market. Confidence in property is continuing to rise, meaning that people moving for work are now more likely to buy rather than rent, no longer fearing they will be stuck with a house they won’t be able to sell later. Most homes now sell in an average of 11 weeks from sale agreed to completion.
Lower priced properties in demand
Some commentators do fear that there may be a price-hike in lower priced properties as these are particularly needed by first time buyers using the Help to Buy initiative to help with deposits. The president of the NAEA, Jan Hÿtch, has been quoted as saying, ‘With Help to Buy making it easier for new purchasers with low deposits to buy a home, the appetite for buying in this [lower] price range, combined with the diminishing supply of first time buyer properties, could drive property prices up further in this sector.’ There is a correspondingly higher supply of higher priced properties, historically the next step for those upgrading from their first home. These properties will be the next to see a shortage, as the first time buyers of 2014 become the upscalers of a few years down the line.
Generally a good sign
After over five years of a failing housing market, the signs are good that sales are now buoyant and that more people are taking the plunge and buying rather than renting a home. The rental market is also doing very well, with demand exceeding supply, so there is clearly a need for more housing to be built to fill the need that is there. The days of houses hanging on the market unsold sometimes for years appear to be over, with estate agents reporting that numbers of sales are not diminishing outside a statistical margin – first time buyers are the upscalers of the future, so hopefully this trend will continue.
Article written by Rebecca Kilburn, freelance copywriter who often writes for ADM Residential.