Source:- Propertyfinder.com Jan 2006
According to the December survey from propertyfinder.com, there has been a re-awakening of first-time buyer interest in recent weeks and the early signs are good for property investors in the UK.
In September 2005, only 25 per cent of those searching for property classed themselves as first-time buyers. This compares to the long run average of 46.1 per cent, reflecting the lack of confidence held by those wanting to get a foot on the property ladder in recent years.
At the beginning of this year, however, the figure had risen significantly to 37 per cent. Although this is still short of the long run average, the leap from September’s figure is undeniably encouraging and it bodes well for the general health of the property market.
Jim Buckle, chief executive of propertyfinder.com, suggests that these fears have started to ease.
“The fact that more first-time buyers are returning to search for property is a very positive sign of a healthy balance returning to the housing market,” said Mr Buckle.
“The numbers are still below the long run average, but it is encouraging to see more people gaining the confidence to take their first step on to the housing ladder,” he added.
“There is no reason to expect a return to the boom days for the housing market, but we don’t see any need to fear a bust. The combination of strong confidence and rising numbers of first-time buyers should enable transactions to continue their recovery. For the first time in years we can look forward to a rational, steady housing market,” he said.
Source Rightmove property Index Jan 2006
The New Year has begun with average asking prices up £2,048 in the first week, reversing
the traditional falls in the weeks before Christmas. One of the driving forces has been first
time buyers seizing the opportunity to get onto the property ladder.
They have identifiedthe quieter period up to Christmas as the bottom of the market as well as a good time to negotiate. This increasing demand has helped push up average asking prices for terraces
by 1.0% (£1,532) to £154,539 over the last month. Flats and apartments have also risen
by 1.0% (£1,543) to £160,092. (Graph 1) The net effect has resulted in an overall monthly
rise of 0.1% (Graph 2) and a final annual rate of 3.6% for 2005 overall. (Graph 3)
The weekly increase of £2,048 is calculated using 29,705 properties new to the market
since the turn of the year, representing over 60% of all properties advertised by estate
agents. Sellers’ asking prices give the earliest indicator of price trends in the market, long
before they feed through into sold prices.
The improving demand at the lower end of the
market and the increasing volumes of transactions in the latter half of 2005 have given sellers and their estate agents the optimism to edge prices up for the more popular
properties. The next few weeks will show whether this New Year optimism is valid.
Miles Shipside, Commercial Director of Rightmove comments “Whilst it’s still a buyers’
market, prospective purchasers now need to think about how long it will remain in their
favour if these increases continue. If you want to trade up, the gap between your home and
the next step up the ladder is smaller when it’s dark and cold in winter before the traditional
market upturn in spring”
Recoveries in the UK property market tend to start in the south and then filter out to the
rest of the country. The rises of 1.3% in both Greater London and the South-East are the
highest in the country. We expect this trend to continue, leading to them outperforming
other regions over 2006 and contributing most to positive price growth.
Rightmove forecast average national asking price increases will remain modest over the year at
approximately 4%. Whilst the market recovery continues, there will be regional variations in
activity and prices. This has been shown by asking prices falling this month in the North
West by 1.9%, West Midlands by 2.3%, East Anglia by 3.4%, East Midlands by 2.6%,
Yorkshire and Humberside by 3.4% and the South West by 4.1%. Sellers will have to
remain realistic, adjusting prices to suit local demand and supply.
Miles Shipside adds “The geographic split is quite marked this month, as sellers in many
parts of the country continue to readjust. London and the South-East have had a couple of
tough years of acclimatising themselves already and are now coming out the other side.
Without their strong performance, the national figures would have been in negative
territory, as you would expect at this time year.”
Improving consumer confidence on the High Street is mirrored by them ‘window shopping’
for property as well.
