Number of first time home buyers in UK rises
The number of first time buyers in the UK housing market increased significantly in the last 12 months as purchases by buy to let landlords fell, new research from surveyors shows.
In January first time buyer valuations surged to a third of housing market activity, up from 25% at the beginning of 2015 while landlords investment was down by 63% year on year.
The research from Connells Surveys and Valuation suggests that Government policies relating to extra stamp duty for additional homes and upcoming tax changes have hit the buy to let market.
In the first month of 2017, first time buyer valuations rose by 21% and increased the importance of first time buyers to the overall housing market with first time buyers now responsible for 34%, a rise of almost 10%.
‘With UK employment close to an 11 year high and weekly earnings rising, many first time buyers are fitter financially than they were a year ago. Aided by cheap mortgages rates, aspiring home owners have seized the opportunity to get their first foot on the ladder,’ said John Bagshaw, corporate services director of Connells Survey & Valuation.
‘The demand for homes has been particularly high in January and as a proportion of the overall valuations, first time buyers are now even more important to the health of the market making up a third of activity,’ he explained.
The research also shows that the number of valuations carried out on behalf of people selling property rose 10% in January 2017, compared to the same month last year. But, while valuations for first time buyers and those selling homes increased, landlord investment has declined by 63% year on year.
The report says that this is partially due to a surge in buy to let purchases in January 2016 as landlords brought forward purchases to avoid the stamp duty surcharge but landlord investment is still well down on January 2015.
‘The new White Paper’s aim of helping tenants through supporting the build to rent sector could be rendered ineffective with this recent drop in investment from private landlords. While a potential increase in build to rent homes will take some years to filter through, the slowdown in buy to let purchases will soon start to bite, with fewer rental properties coming onto the lettings market. This shortage of supply could fuel competition from tenants with the potential to push up rents,’ said Bagshaw.