FTBs storm the property ladder during January

New data from Connells Survey & Valuation has found that during January there was a noticable jump in the number of first-time buyers stepping on to the housing ladder.

In the first month of 2017, first-time buyer valuations rose by 21%, driven by high employment and an uplift in weekly earnings.

This has increased the importance of first-time buyers to the overall housing market, with first-time buyers now responsible for a third of activity (34%), up from a quarter at the start of 2016.

John Bagshaw, corporate services director of Connells Survey & Valuation, said: “With UK employment close to its eleven year high and weekly earnings rising by 3%, 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. The demand for homes has been particularly high in January, with the Connells Group estate agency network for instance seeing nearly 12 applicants per each new instruction that comes onto the market.”

John continues: “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. It will be reassuring for the Government to know that their policies to boost demand from first-time buyers are bearing fruit.

However, more work is still required to ensure the supply side of the housing market is fit for purpose. First-time buyers tend to be younger couples, keen to start families, so need to be able to move up the rungs on the property ladder easily. The policies to ensure the right homes are built in the right places within the new White Paper should help boost the supply of family homes, but the Government must also deliver on their pledges to build homes faster to ensure a healthy housing sector over the next few years.”

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.

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.

John Bagshaw concluded: “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.

There is a serious risk that the Government’s attempt to increase the number of affordable homes to rent will also be overshadowed by the impact of George Osborne’s taxation policies aimed at private landlords. As the Government’s definition of ‘affordable’ is linked to the market averages, rather than tenant incomes, rising rents could mean new ‘affordable homes’ are out of reach for those just about managing.”

source http://blog.evolutionproperties.co.uk/2017/02/12/ftbs-storm-the-property-ladder-during-january/