First-time buyers making a comeback

Permalink: First-time buyers making a comeback
by Kay Murchie

According to the National Association of Estate Agents (NAEA) first-time buyers appear to be returning to the property market.

The NAEA said estate agents had an average 300 househunters registered with them last month - a level not seen since the market peaked in September 2007.

However, demand is outstripping supply with the number of properties available at estate agents falling to 69 in May from 76 the previous month, this is equivalent of four house hunters for every property.

Meanwhile, buyer interest translated into sales during May with an average of 10.4 homes sold by estate agents - the highest level since October 2007, and the fifth consecutive monthly rise.

The NAEA has also welcomed the return of first-time buyers after figures suggest this group of people appear to be flooding the market.

The proportion of homes sold to first-time buyers surged to 43% in May, up from the 23% seen in April - a level not seen since September 2001.

The NAEA said these figures suggest that people want to buy now, before house prices begin to rise again.

A survey carried out for the Building Societies Association echoes the NAEA’s research after it was established that 59% of people said they believe now is a good time to buy a property.

The survey found that almost half of people questioned think house prices will increase in the next year, while 12% think they will stay the same.

Commenting on the NAEA’s figures, Gary Smith, president of the NAEA, said: “This is really good news for the housing market and the UK economy in general.”

However, economists have cautioned that while activity in the market appears to have bottomed out, the fact remains that mortgages are still hard to secure without a significant deposit and rising unemployment continues to have a negative impact on the market.

Today, the Council of Mortgage Lenders (CML) revealed that mortgage lending fell by 58% in the year to May 2009.

Gross mortgage lending totalled £10.3 billion in May, 2% down on the £10.5 billion reported in April, according to the CML. Furthermore, May’s figure is 70% lower than the peak of summer 2007.