Fewer first time buyers in December despite falling prices

Fewer first time buyers in December despite falling prices

The number of first time buyers (FTBs) picking up keys fell in December compared with November despite average prices coming down by 0.5%.

In total there were 1,300 fewer FTBs in December, a drop of 4.7% on November as the Christmas slowdown took effect.

However according to information published by Reeds Rains and YourMove the outlook is still healthy, with 1.1% more active FTBs compared with 12 months previous.

Estate agents Your Move and Reeds Rains believes there is cause for optimism because of cheaper homes and more affordable mortgages in light of the Bank of England signalling it does not intend to raise interest rates from their historically low level for the forseeable future.

The average price paid for a first home dropped form £153,275 to £152,470, a drop of 0.5% month to month, although the average price has risen by £5,518 since December 2014 (3.8%).

The average size of a deposit also fell 0.5%. However the average size of deposits have consistently fallen over the past year, down 7.8% since December 2014

Adrian Gill, director of estate agents Your Move and Reeds Rains, said: “December’s first-time buyer market is once again suffering from the effects of the Christmas crunch. Most of those looking for their first home turn their attention – and their finances – towards an often very costly festive season. As a rule, they tend to put their home ownership ambitions on hold until the New Year. It’s an inevitable part of the seasonal cycle that the property market goes through every year.

“Beyond this, an examination of the year-on-year figures reveals a property market that – festive slowdown aside – is going from strength to strength. Steady growth over the course of the year indicates a resurgence in first-time buyer confidence. First-time buyers have been buoyed by a positive economic climate and a range of Government incentives – such as the reduction of Stamp Duty on lower-priced properties – designed to lessen at least the immediate costs of home ownership. They have increasingly come into their stride as 2015 has progressed.

“Some of the credit for this revival in activity should also go to first-time buyers themselves. Over the course of the year they have toughened up their act and sought to get the best property they can at the best price – it’s a skill that will serve this group well as they head into 2016.

“For those willing to put Christmas concerns and festive fun to one side, December offered an opportune time for first-time buyers hoping to get on the ladder and not break the bank. First-time buyer home values stalled in their upward advance. But, on a long-term basis, values increasing steadily indicate there’s more work to be done, by both Government and house builders, before that short-term flash can be turned into a long-term improvement.

“It’s also pleasing to see a decline in the proportion of first-time buyer monthly income consumed by monthly mortgage repayments. This is a sign both that first-time buyers are enjoying sustained real-term increases to their salaries and that they are not burdening themselves with hefty mortgages for properties they will struggle to afford.

“These are favourable conditions which first-time buyers will hopefully still be able to enjoy early on in 2016, provided they can shake off the last of the festive fuzz and focus their minds once more on setting foot on the property ladder.”

Josh Morris

Josh is the Journalist for the Today's Group and writes many of the articles for Today's Conveyancer. He graduated with a degree in Physics from Cardiff University in 2009 before training as a journalist. He has previously written for The Times, The Mirror and The Daily Express.

Leave a Reply

Your email address will not be published. Required fields are marked *