The number of first time buyers is up 68% compared with June last year, the highest rise for over 10 years, says the latest data from haart estate agents while the total number of new buyers in June across the UK is up 29% on a year ago.
First time buyers now represent 44.3% of all mortgages written and are, on average, aged 32.1 years, some seven months younger than a year ago.
The firm’s data also shows that the total new supply of homes for sale down 5.5% on the year and 2.7% on the month suggesting a chronic shortage of stock.
House sales remain subdued, up only 0.6% on June 2012, these constrained by the shortage of homes for sale and national house prices are up 0.5% on the month but remain only 0.1% up on last year. However, London prices are up 6.9% on the year.
‘The growth in new buyers looking to purchase has been significant over the past 12 months, particularly for first time buyers. However, potential buyers are being frustrated by the acute shortage of properties for sale,’ said Paul Smith chief executive officer of haart.
He explained that if existing home owners seeking to buy put their own properties up for sale first this would significantly help provide liquidity in the market, which is presently log jammed.
Meanwhile, other research shows that the number of home sales falling through is falling. Approximately one fifth, 19.77%, of house sales fell through in the second quarter of 2013, down from 29.74% in the second quarter of 2012.
The long term trend in house sale fall through rates has been a steady fall since peaking in July 2008. Fall through rates have improved due to an increase in the proportion of cash buyers and offers only being accepted if they are accompanied by mortgage approval in principle.
‘The reduction in the proportion of fall throughs that we’ve seen in the last quarter is a continuation of the long term trend since July 2008. Whereas previously, buyers tended to make offers and then secure a mortgage, often unrealistically, now we find that people making offers are much more committed and they are either cash buyers or they have a mortgage agreement in principle in place,’ said Donna Houguez, market analyst at Quick Move Now.
She pointed out that increasing market confidence following tentative signs of an economic recovery, rising transaction levels and prices, and the introduction of the government and Bank of England backed Funding for Lending and Help to Buy schemes could be expected to further improve the fall through rate.
‘However, given that it tends to be a barometer of misplaced confidence, we are expecting that if offer numbers rise in the next quarter, so too will the rate of fall throughs,’ added Houguez.
