First time buyer purchases up 39% on last year
The number of purchases made by first time buyers has risen 39% on January 2015 despite recent falls of 4.8% from December and 7.3% on the three month average.
The First Time Buyer Barometer, released by Your Move and Reeds Rains also states that George Osborne’s much trumpeted Help to Buy initiatives have made little or no impact with 43% saying they made no impact and a further 30% saying they hadn’t even heard of it.
Adrian Gill, director of estate agents Your Move and Reeds Rains said: “First-time buyers are moving from weariness to fearlessness. They are long-used to the housing market being a sellers’ arena and have come to expect daunting deposit costs and prohibitive property prices. But, ultimately, the desire among first-time buyers to own their own home is outweighing those considerations as they resolve to get on the property ladder sooner rather than later – be that through saving money or compromising on their property specifications.
“Moreover, despite the gloomy headline figures, there are still enough positive fundamentals in the property market to make taking the plunge a worthwhile investment. High LTV loans are plentiful, the average mortgage rate is still at rock-bottom levels – bolstered by the Bank of England’s refusal to contemplate raising rates any time soon – and the economic outlook remains mostly sunny. Indeed, first-time buyers getting on the ladder now are demonstrating cunning as well as courage – they understand that, while the home ownership costs may not be ideal, conditions could be worse. After months of turbulent fortunes, they’ve come to know better than to look a gift horse in the mouth.”
The cost of the average deposit has continued to rise in line with rising house prices, up 10% in the past three months following on from the introduction of the Help to Buy ISA In addition to the 43% who said Help to Buy made no difference and he 30% who hadn’t heard of it, just 18% said it made a moderate or significant difference.
Adrian Gill continued: “It’s disappointing to see the Government’s Help to Buy scheme has not quite penetrated into the mainstream of the first-time buyer market. It’s a great product for those who have the capital and job security to sustain regular mortgage payments, but who just need a little support paying the initial costs to secure that ideal home. It’s also worth noting that even if the scheme assisted only a fraction of the first-time buyer market, that’s still several thousand people every year who have had their home owning aspirations realised in part because of Help to Buy. Amid all the impersonal data, it’s important to not lose sight of these human stories.
“Nevertheless, we are clearly seeing a growing trend of self-reliance among the first-time buyer population. They prefer to use their own initiative when saving for their first home, rather than reply on state support, however well-intentioned. With a positive economic climate where job security is strong and real-terms wages are rising, it’s realistic for first-time buyers to have this tough but optimistic outlook. Let’s hope they can keep hold of it as 2016 progresses.”