Monday 21st July 2014
The number of property purchases by first-time buyers decreased by 5% in the last month, according to the National Association of Estate Agents (NAEA).
The regulatory body’s June Housing Market Report, using data provided by its estate agent members, shows that the number of first time buyers dropped to 20 per cent, down from 25 per cent in May 2014, the lowest level recorded since May 2013.
The struggle for new buyers is reflected in the age of those buying a property in June, as those aged 18 to 30 represented just 3% of all house sales, the lowest percentage of young house buyers recorded by the NAEA to date.
Nearly 80 per cent of NAEA member agents believe the recent announcement by the Bank of England governor, Mark Carney, on the cap on high-risk mortgages, which will see only 15 per cent of new mortgages at 4.5 times a borrower's income, will affect the number of first-time buyers and home owners looking to move.
NAEA Managing Director, Mark Hayward said the implications of the recent Mortgage Market Review (MMR) combined with stamp duty and high deposits are making it difficult for new buyers to get on to the property ladder.
“Things are getting even tougher for first time buyers. New rules mean buyers also have to prove they can easily afford repayments now and in the future. Alongside this, a scaling back of the governments Help to Buy scheme will also have a significantly negative impact on the first time buyer market,” he added.
Despite a lull in first-time buyers, the NAEA’s latest housing report highlights an increased number of properties for sale per NAEA branch member; an indication the market is still strong. Available properties increased to an average of 46 per branch, compared to 44 recorded in May this year.
Although this figure represents a month-on-month rise, the average is still relatively low as the number of available properties per branch has not eclipsed 50 since November last year, or 60 since May 2013.