First-time buyers edged out of the market in March


03/05/2016

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  • First-time buyers lost ground to buy-to-let investors with the number of first-time buyers registering dropping by 3% on the month
  • Sales transactions soar 19% on the month and 17% on the year across the UK
  • Demand for homes soars 26% on the month in London but dips 5% in the rest of the UK
  • The number of new homes coming onto the market surges 22% on the month in the UK and 31% in London
  • UK house prices rise 12% annually in March to reach an average of £232,030

 

UK house prices rise

 

Paul Smith, CEO of haart, the UK’s largest independent estate agent comments:

“First-time buyers saw intense competition from buy-to-let investors in March, and many were squeezed out of the market. There were 3% fewer first-time buyers registering with our branches, while buy-to-let sales soared by 19% as investors rushed to avoid the new stamp duty surcharge, which came in on 1st April.

“First-time buyers are also under pressure to spend more, with the price of starter homes up almost 13% on last year, and average mortgages rising by an extra £18,318. Deposits were also up 5% on last year, making it even more difficult for people looking for their first home to get onto the ladder.

“However it’s likely that first-time buyers have only been temporarily deterred by the level of competition. As we enter April we have already seen a significant reduction in the number of investors, with buy-to-let sales in the first two weeks of April down 55% on the same time in March. As investors take a step back from the market, the outlook for first-time buyers in the coming months looks brighter.”

 

National Trends

The number of first-time buyers entering the market fell by 3.2% on the month and 1.9% on the year, due to the high level of competition with buy-to-let investors. First-time buyer house prices increased 12.7% annually, a faster rate of growth than the rest of the market, to reach £178,299, a record high for the seventh month in a row. These rising prices may also have contributed to first-time buyers pulling out of the market. 

Average property prices (UK) graph

 

 

This is supported by the fact that the average first-time buyer deposit rose 5.3% on the year and the average mortgage rose 14.6% annually. The average age of first-time buyers has increased from 31.1 to 31.7 since February.

The average UK house price saw a significant annual increase in March, up by 12.1% annually and 0.5% on the month, to reach an average of £232,030. 

The supply of new homes coming onto the market has surged by 21.6% in the last month alone, but is up just 2.2% on the year. The monthly increase is a seasonal trend as vendors rush to enter the spring market. Meanwhile, the number of new buyers has dipped 5.1% on the month and 3.1% annually. 

Buyer activity analysis

Meanwhile sales surged by 18.8% on the month and 16.7% on the year in March, as a result of a surge in the number of buy-to-let investors rushing through transactions before the 1st April stamp duty deadline. 

First-time buyer mortgage analysis

 

 

London property market

The average property price in London has increased by 9.9% annually, less than the average house price growth for the UK as a whole. However, in North West London, house prices have seen a huge 29.5% increase over the last 12 months.

London property buyers activity

 

Demand for properties in London sky-rocketed 26.4% on the month in March and number of new properties for sale in the Capital has also seen a dramatic increase, up nearly a third since February.  Sales transactions in London have risen 8.4% on the month and 11.6% on the year. 

Viewings of properties for sale

 

First-time buyers in London registering as applicants