Paul Smith, CEO of haart, the UK’s largest independent estate agent comments:
“First-time buyers flooded the market in February, with the number of registrations up a huge 22.7% on last year and up 7.6% since January, the highest monthly increase in nearly a year. However as demand from first-time buyers has increased, so have prices, with starter homes reaching a record high for the sixth month in a row. First-time buyers paid an average of £176,281 in February, which is a 9.8% annual increase, or nearly £16,000 in just one year.
“The buy-to-let market began to cool in February as most landlords sought to finalise their purchase before March, allowing time to complete before the April deadline for new rules on stamp duty. However despite the temporary lull in the buy-to-let market, there is no reprieve for first-time buyers, who are still facing intense competition for properties. A shortage of new homes coming on to the market is still making their property search difficult, and today’s data shows that competition for properties will only increase as we enter spring, which is one of the most popular times to buy a new home.”
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.
UK house prices dipped by 5.3% on the month in February but increased 4.1% annually to an average of £218,833.
The number of new buyers has surged by 29.6% since last February and is up 6.4% on the month. However the supply of new homes has been unable to keep apace and has only increased 6.7% annually, meaning there are still nearly 15 buyers chasing every property to come onto the market.
Viewings are up 9.4% on the month as people look to move in spring. Sales shrunk by 8.2% over the same time period, however this trend is likely to reverse in the coming months as the growing interest from potential buyers comes to fruition.
The number of first-time buyers entering the market surged 22.7% annually in January and rose 7.6% on the month, the biggest monthly increase in first-time buyers in nearly a year. First-time buyer house prices rose 9.8% annually and 0.8% on the month to reach £176,281, a record high for the sixth month in a row.
At the same time, the average first-time buyer deposit rose 5.4% on the year, and the average mortgage increased 11% over the same time period. First-time buyers in February made up 40.1% of mortgages written, up from 38.6% a month previously.
The average property price in London has increased by 19.3% annually but dipped 1.3% on the month to an average of £544,430. However activity in the London market started to heat up in February with the number of new buyers registering up 13% annually and 6.4% on the month. Meanwhile the number of new properties for sale rose by 6.7% in the year. The number of first-time buyers surged 9.1% on the month and 4.9% annually in London.