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House price expectations fuel first-time buyer spending
– The number of first-time buyers rises 42% year-on-year to 22,400, boosted by Help to Buy
– 81% of first-time buyers anticipate further price rises in the next 12 months
– Average first-time buyer deposit falls to 16 month low of £25,773
Overview
The number of monthly first-time buyers increased 42% year-on-year in February, as buyers snapped up property in anticipation of future price rises and took advantage of better mortgage availability according to the latest First Time Buyer Opinion Barometer from LSL Property Services. There were 22,400 first-time buyer transactions in February 2014, up 42% from 15,800 in February 2013.
Comment
David Newnes, Director of estate agents Your Move, part of LSL Property Services group, said: “The reason first-time buyers are taking advantage of Help to Buy in such numbers is that they expect prices to keep rising. That’s pushing up demand in the short term, which is supporting prices in the long term. Rising prices and growing transaction numbers are encouraging house building, which will boost the country’s housing stock. The question is whether supply will now catch up with demand of its own accord – or does the government need to do more to boost building? It may be time for an overhaul of the planning rules which have hampered house-building in the UK, delivering lower levels of house building at a time when the need for more new housing keeps growing. We asked first-time buyers what they thought house prices will do over the next 12 months and over 80% said they think prices will rise reflecting the fast growth in buyer confidence in the housing market.”
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