With the positivity of spring in the air, now appears to be the perfect time for first-time buyers to take their first step onto the property ladder. Our most recent haart monitor shows that demand from first-time buyers surged by 22.7% annually and 7.6% on the month in February, the highest monthly increase in nearly a year. This comes as record low mortgage rates and government assistance through Help to Buy combine to bring home ownership within easier reach for first-time buyers.
Over the last couple of months, those keen to get onto the property ladder have had strong competition from buy-to-let investors desperate to complete purchases before the 1st April deadline for the stamp duty surcharge. With the deadline now passed, the next few months look more positive for first time buyers – which is great news for those looking to buy for the first time.
However, as demand from first-time buyers has risen, so have prices, with starter homes reaching a record high for the sixth month in a row. The average price for a first-time buyer home was £176,281 in February, which is a £16,000 annual increase, the same as the average salary for a 20-24 year old. It seems there are both ‘push’ and ‘pull’ factors for first time buyers – rising house prices and the cost of renting are pushing many to buy their first property, while government incentives are also pulling more buyers in the same direction.
The property market may have reawakened from its winter hibernation but it has been unable to keep apace with demand for new homes, meaning there are still nearly 15 buyers chasing every property to come onto the market. This means the market is extremely competitive at the moment.