The proportion of intending home-buyers over the next 12 months who will be purchasing for the first time is at its highest level for nearly three years, making up nearly three in 10 of those who expect to buy a property over the next year, according to Rightmove’s latest survey of first-tjme buyers.
“The results come as a welcome surprise, hopefully this three year high in intending first-time buyers will come to fruition,” said Miles Shipside, director of Rightmove.
“It seems that some five years into the property market downturn, more are getting their heads and wallets around the new rules of first-time home-ownership, though they still face some testing challenges. The property market needs this upward trend in first-time buyer activity to continue as first-time buyers perform an essential role at the bottom of the property market food chain. They give second-steppers the resources to trade up the housing ladder, as well as alleviating demand and upwards rental pressure in the rented sector.”
In the survey, 27.9% of those who confirmed they intend to buy in the next 12 months state they will be buying for the first time. This is the highest proportion of intending first-time buyers since Rightmove began its series of Consumer Confidence Surveys in Q4 2009. At that time a marginally lower proportion of 27.6% was recorded, and since then it has fallen as low as 22.2%.
“There is still a minefield of economic uncertainties to navigate for those intending to purchase their first home, though this is the highest proportion since Rightmove began its mass survey of home-movers’ intentions nearly three years ago,’ said Shipside.
“These are encouraging signs that the gap is narrowing to get closer to the pre-credit crunch norm where the level of first-time buyers was closer to 40%. This is the proportion typically associated with a more active and healthy housing market, but we are still some way off that, and first-time buyers remain an endangered species in some locations.”
Meanwhile, the average ‘on the ladder age’ has fallen by one year. When surveyed in October 2011, the average age of intending first-time buyers was 32. In this survey, some six months later, the figure has fallen by one year to 31 years old.
Shipside said: “It has taken time for would-be first-time buyers to come to terms with the paradigm shift in the housing market. Where once they were being pursued by risk- nonchalant lenders, today’s aspiring homeowners must get their finances in shape and make sure they are fit enough to jump the high credit-score hurdles that are now in place. It now comes as no surprise as to what is required in this new risk-averse world. There is also an element that prospective first time buyers have got fed up of watching the grains of sand slip through the hour-glass of life, and a few more have got their act together to find ways to beat Father Time.”
Raising enough of a deposit remains the single biggest concern amongst intending first-time buyers 33.3%. However, this has fallen from 42.2% a year ago, indicating that more are saving hard and those savings are accumulating over time. Indeed the biggest concern for an increasing number is no longer the size of the deposit required, but finding a suitable property to buy. This is up from 23.0% a year ago to 30.2% in this survey.
“It’s been a tough few years for frustrated first-time buyers and those now in a position to proceed will have saved hard to avoid being ‘locked out’ of the property market,’ said Shipside.
“They appear to have moved on from the post stamp-duty holiday slump, and are now looking to re-engage with the trials of getting onto the housing ladder. It is encouraging that some are now moving on from the deposit challenge to the more exciting and rewarding one of finding a suitable property to buy.”