First time buyer activity rises
First time buyers increased their market share on the UK housing market to 36% in February, an 8% rise from February 2016.
A recent report from Connells Survey & Valuation claims the buy to let market has significantly declined, falling below 10% last month for the first time in five years.
Mortgages are more affordable than ever with the near zero base rate and lending at its highest level since 2008.
John Bagshaw, corporate services director at Connells Survey & Valuation said: “Continued affordable mortgages have provided first time buyers with an ideal opportunity to take their first step onto the ladder in February. Lending to aspiring home owners continues to rise, while the base rate remains so low. For those with enough savings for a deposit, now is a great time to buy. Many are taking advantage of the opportunities on offer.”
February 2016 saw an increase in buy to let purchases ahead of the stamp duty surcharge however since then activity in the buy to let sector has almost halved.
“The stamp duty surcharge has succeeded in helping first time buyers at the expense of landlords. But this may well be temporary. Less competition for today’s first time buyers comes at the expense of tomorrow’s. Most people rent as they save for a deposit, but the steady investment into the rental market is running dry,” Bagshaw explained.
Mr Bagshaw also pointed out that with a limited stock of new properties being built for the private rental sector rents will begin to rise, reducing tenants’ disposable income and their savings for a deposit.
He advised that the increase in activity does not necessarily mean long term prospects for first time buyers as the rise to 36% was only slightly higher than the 10-year average.
“The rapid growth in first time buyer activity is a recovery from a lower position, rather than a substantial improvement in market conditions. It’s important to not just look at the snapshot numbers but take into account the long-term trends. It’s still incredibly difficult to get on the property ladder,” Bagshaw said, adding that with Brexit approaching, economic conditions may get tougher.
Full article available on Property Wire: http://www.propertywire.com/news/uk/first-time-buyer-activity-uk-housing-market-soars-expense-buy-let/