First time buyer numbers increased during the month of March, with real estate agents hopeful of seeing these numbers increase even further now that the new Stamp Duty rise of 3% on buy-to-let and second home properties has been initiated.
The latest Housing Market Report by the National Association of Estate Agents (NAEA) says that 28% of total property sales during March were by people purchasing their first home. That number has risen from 24% in February and there is every possibility that it will continue to rise in the coming months, though perhaps not by such a large jump as 4%.
Availability Set to Increase for First Time Buyers
The NAEA’s latest report also reveals that 36% of estate agents (who are NAEA members) believe that the first time buyer numbers will increase significantly due to the drop off in competition for properties. An even larger 39% believe that the Stamp Duty rise of 3%, introduced on April 1st, will reduce interest in available properties from investors seeking properties to let out or keep as second homes, thus further increasing the availability of properties for first time buyers.
The NAEA Managing Director, Mark Hayward, says that, “The last few months, first time buyers have had to compete with landlords for the same properties and those landlords have really pushed hard to complete ahead of the rise in Stamp Duty. Now, in theory, things should get easier for first time buyers as we have seen with a slight increase in sales this month and as those seeking to buy-to-let will tail off.”
Long Term Prospects Have Not Greatly Improved
Although this sounds very hopeful for first time buyers, Mr Hayward did sound a warning that buyers seeking their first homes should not expect any major changes to their prospects. He continued, “However, in reality, it’s unlikely in the long term that first time buyers will notice a huge difference, as prices remain high and housing is in short supply. The Government needs to significantly increase the number of homes that are being built in this country to really make a difference to those that are struggling to get on the housing ladder.”
Supply Increases as Demand Decreases
The NAEA Housing Market Report reveals that the supply of houses available to all kinds of buyers, not just first timers, grew by a huge 54% in March from 35 properties available to buy (per branch associated with the NAEA) in February to 54 in March. However, demand actually decreased in March, with NAEA estate agents reporting 417 (on average) potential buyers registered per member branch, which is significantly down from the 463 that were registered in February, which was the highest level in well over a decade.