The number of sales made to first time buyers rose for the second month running, to the highest level in six years, according to the National Association of Estate Agents’ (NAEA) October Housing Market Report.
Last month there was an average of nine sales made per estate agent branch in total and 31% of these sales were to first time buyers. Last month, the group accounted for 29% of all sales, and in August just 20% of transactions involved first time buyers, meaning a jump of 11 percentage points in just two months.
Mark Hayward, managing director, National Association of Estate Agents, said: “It’s really promising that, for the second month running, the number of sales being made to first time buyers has risen. Competitive mortgage products and the increasing pressure of an interest rate rise could be encouraging first steppers to take the plunge, as well as the dwindling supply of rental housing stock – putting pressure on renters to buy.”
The supply of available housing increased in October, ahead of the Christmas slowdown. The number of properties available to buy per branch increased by 16% from 37 in September to 43 in October. On the other hand, demand for property dropped slightly from an average 342 house-hunters per branch in September, to 336 in October.
Hayward added: “Although it is great to see supply growing and demand falling – albeit by just 2%, we cannot rest in the knowledge that the housing market is on the ‘road to recovery’. What we’re seeing is a seasonal uplift. Those selling their homes are keen to push through sales before Christmas, hence the uplift in properties entering the market – but with the average sale taking between nine and 12 weeks, it’s unlikely transactions will be pushed through before Christmas now. Buyers are holding off until January to kick off the New Year with a house-hunt.
“The only way we can attempt to repair the market is simply by building more houses. Osborne’s pledge last week to build 200,000 new and affordable starter homes – with a discount for those under the age of 40 – and his promises to offer loans to small builders, reform the planning system and re-designate commercial land to build new homes are all a step in the right direction. But until it’s all put into motion and we see the walls of new properties going up, we’re not holding our breath.”