There was an increase in the number of sales made to first time buyers in September, according to the latest National Association of Estate Agents (NAEA) Housing Market Report.
Buyers taking their first step on the housing ladder accounted for 29% of all sales in September, compared to 20% in August – the highest since May this year when sales to the group made up 29% of total sales.
Mark Hayward, NAEA managing director, said: “It’s obviously very positive to see that the number of sales being made to first time buyers has risen this month. We saw an average nine sales going through per branch in September, which means that for each branch, around three sales were made to the group. We’re seeing a whole range of new competitive mortgage products coming on to the market, which is likely to be encouraging first steppers to take the plunge, as well as the fact that the ‘impending’ interest rate rise has now been pushed back to next year at the very earliest.
“However, in order to ensure there is enough affordable housing on the market for first time buyers, we need the issue of supply and demand to be addressed in a big way. Until substantial numbers of new houses are built, we won’t see every first time buyer reach the bottom rung of the ladder.”
The number of house-hunters registered per estate agent branch dropped in September, following a period of high and unsustainable demand in July and August, the report found.
On average, there were 342 prospective buyers registered at each NAEA member branch in September. This is a drop of 16% from the 408 recorded in August, and a 26% drop from July when demand reached an 11-year high with average 462 house-hunters per branch.
The number of properties available to buy dropped marginally to 37 per member branch in September. This followed a huge fall in the availability of housing stock the month before, when the number of properties available fell from 55 in July to 38 in August – a decrease of 31%.
Hayward said: “If we could just get supply and demand to meet in the middle, the housing market would be functional again; it’s a real issue across the market at the moment. Developers are struggling to secure planning permission and labour is in short supply. This means that the army of house-hunters looking to buy has out-grown the number of housing available at a rapid rate, and it’s completely unsustainable.
“The introduction of the Housing and Planning Bill – announced last week – is good news however. It includes an extension of the Right to Buy to Housing Association properties, which should help to increase supply in the housing market as homes that are sold through the scheme will be replaced on a one-for-one basis. Nonetheless it’s really important that in urban areas, replacement properties are built within the same local authority boundaries as the original homes that were sold, so that stock is replenished evenly across city regions.
“Demand has dropped 16% this month, and first time buyers are making up a larger proportion of sales – which does indicate that the market is on the road to recovery, but it simply isn’t enough. Even with the promises outlined in the Housing and Planning Bill – there are still nine house-hunters fighting for each property and new housing just isn’t being built quickly enough.”