Excellent news has recently been released concerning first-time buyers, who have stepped up their activity in the UK housing market this year.
May 2013 saw a 42% rise in first-timers, compared to the same month of 2012 – up to 25,100. That is a far cry from the January 2009 low of just 8,500.
This is according to the Council of Mortgage Lenders, who also released the fact that, by value, £3.4bn worth of mortgages were issued to first-time-buyers, relative to £2.5bn in April and £2.2bn in May 2012. New entrants thus accounted for 45% of the entire house purchase loan market in May.
Why is this such a substantial boost for the property market?
– Many first homes are new, with buyers taking advantage of generous Government and Developer led schemes like Help-to-Buy and Shared Equity. That means profits for the developers, leading to greater investment and more homes and jobs in the future.
– For those buying homes in the private sector and thus forming part of a purchase ‘chain’, those previously stuck on the bottom rung of the property ladder are free to move up. Fresh buyers coming in to the market therefore lubricate the whole system and activity breeds activity.
The news comes as the Nationwide Building Society releases figures that reveal the fastest rise in property prices for three years. The annual increase of 1.9 per cent registered in June bumped the average British house price to £168,941.
The picture across Britain is one of stark contrasts. In London, prices are at a record average high of £318,214 — 5 per cent above the pre-crash 2007 peak. Every other region is typically about 9 per cent below their pre-crisis peak.
In England, prices are 5 per cent lower than in 2007. In Wales they are down 13 per cent and in Scotland by 12 per cent. Northern Ireland has been most affected: prices have fallen 53 per cent.
Investors and property owners will hope the injection of new activity brought by first-time buyers and improving bank approval rates will translate into a long awaited house price recovery and the June figures certainly indicate a movement in that direction.
For a full breakdown of the current state of the property market, read our Monthly Property Market Fact File here.
SRJ / LCB 15/07/2013