New buyers are coming onto the market in droves and have increased 31% annually.
The number of first-time buyers is also up 75.7% across the UK. The second phase of the Help to Buy scheme to be introduced in January 2014, the mortgage guarantee, which is open to both new and second time buyers, will see these figures boosted further as more people who previously thought property ownership was out of reach find they can take this step.
Property sales have also seen a 5.8% annual increase, but are slightly down on the month (0.3% from July 2013). This is partly due to the fact that the supply of new properties to the market is insufficient to satisfy the impact of the newly stimulated mortgage market, which is in turn suppressing sales levels.
Buyer viewings are up 5.7% annually and 3.6% on last month, which shows that prospective buyers are increasingly active in their search.
Competition is fierce as the ratio of viewings to every property for sale is 8:1, an increase of 6.5% on last year and 4.6% on July 2013. This is due in part to the significant increase in buyers on the market without a correlating increase in supply – more people viewing fewer properties.
First-time buyers now account for 42.2% of all mortgages written which is a 7.6% increase on August 2012. At 32.1 years of age first-time buyers have not been younger since March 2012. In addition the deposit they are expected to fork out is 3% lower than last year. The current confidence in the housing market is increasingly favourable for the first-time buyer
Demand is far higher in London than across the rest of the UK with a 102.4% annual increase in first-time buyers and 61.1% increase in the number of new buyers on the market. The volume of property coming onto the market for sale is significantly down on last year, which is likely to further boost the astronomical prices we are seeing in London.
Despite the boost in new buyers the number of viewings is down 5.7% annually – Londoners are clearly aware of the pace of the London market and that the property they have their eye on will be snapped up quickly. Again the ratio of views to properties is up to 11:1, another symptom of the lack of supply as more people view fewer properties.
Sales are up 3.4% on last year but down -4.1% on the month as the lack of supply puts a dampener on completions. East London is a hotspot with a 14.5% jump in property prices annually and transactions in West London have soared 20.8% on last year, levels which outshine the other postcode areas.
Paul Smith, CEO of haart, with a network of over 100 branches, comments:
“First-time buyers are back on the scene - this is the best they have had it since the economic crash. Their registrations are up 75.7% annually across the UK and have more than doubled in London. This is in part due to the back-log of people who decided to rent over the last five years rather than buy, but are now benefiting from improved lending conditions.
The deposits they are putting together are more affordable, down 3% annually and first-time buyers have not been younger since last year. The second phase of the Help to Buy scheme in January 2014 (mortgage guarantee) will place the aspiration of home ownership within the reach of many more.
Second steppers will also benefit from this tsunami of first-time buyer demand as their properties will be snapped up in record time and our branches are currently achieving 98.9% of asking prices. Potential sellers should recognise these perfect conditions.
The underlying “property bubble” niggle remains, though the distinct difference this time is that lending is more responsible. It is highly unlikely that we will see a return to the 100% LTV mortgage and extreme sub-prime market.”
