Low interest rates and budding buyer confidence has given an unexpected Summer boost to the UK housing market with first time buyers accounting for a quarter of all sales.
More than one in four, some 26%, of home sales in August went to a first time buyer, according to latest figures from the National Association of Estate Agents (NAEA), a level not reached since July 2010.
Overall figures from the NAEA August Housing Market Report show encouraging growth with the average number of first time buyers increasing from 22% in July to 26% in August, suggesting the impact of looser lending restrictions and uptake of Help to Buy are beginning to be felt.
NAEA members also reported an increase of nearly a third, some 28.8%, in the average number of house hunters per branch, up from 250 in July to 322 in August. Members also reported a slight increase in the average sales agreed per branch in August at nine compared to eight in July.
While sales and house hunters are up, however, supply levels saw a slight decrease over the course of the month, meaning that buyers face rising competition for the best homes. The number of available properties per branch decreased from 53 in July to 52 in August suggesting properties are being snapped up by eager buyers looking to take advantage of continuing low rates.
The research also shows that it's the forty something movers who are leading the way. Some 40% of home buyers last month were aged between 41 and 55 years old, followed closely by 31 to 40 year olds at 36%.
Buying a house as a couple was the most popular method seen by member agents with nearly eight out of 10 properties being sold to couples. Only 12% were sold to individuals.
‘The return of first time buyers purchasing property has been anticipated for some time now. The combination of low interest rates and help from the government has made purchasing a home more attainable for first time buyers and it is good to see that many of them are taking advantage of the incentives available,’ said Jan H?tch, president of the National Association of Estate Agents.
‘The significant increase in the number of house hunters, particularly in what's often a quiet time in the market, is also a very positive sign that confidence is returning. The Bank of England has recently announced intentions to keep its base rate at 0.5%, and the guidance that it won't be increasing rates until the recovery is stabilised is great news for those with a mortgage. It also has the double benefit of potentially stirring up further interest amongst property buyers who have until now been biding their time,’ she explained.
‘The drop in the supply of houses to the market suggests that with the improved conditions buyers may be holding on to their properties for longer, in the hope of a higher sale value as demand picks up. Choosing an NAEA agent with experience of the local market will ensure the valuation is accurate and set at an optimal level from the outset, for the best possible chance of a sale being achieved,’ she pointed out.
‘The variety and accessibility of schemes now on offer to help buyers onto the housing market can also be thanked for generating house buying interest in 2013. Initiatives such as Funding for Lending, shared ownership, NewBuy and Help to Buy all seem to be encouraging growth and have helped make August a remarkable month,’ she added.