London first-time buyer levels remain high
Rightmove’s most recent Consumer Confidence Survey has revealed some encouraging news that first-time buyer levels in the capital remain are remaining high.
Each quarter Rightmove’s records the proportion of people who intend to buy over the next year who state they will be doing so for the first time. The Q2 Consumer Confidence Survey found that nationally 26.2% of buyers over the next 12 months will be first-time buyers, the highest level since the same period last year and an increase of almost 4% on Q1. In London the proportion was far higher with 42% of buyers stating they would be purchasing for the first time, an increase from 38.2% in Q1.
Rightmove director Miles Shipside comments: “The long term health of the housing market has depended on around 40% of purchasers being first-time buyers, so with the national figure hovering just above a quarter it means overall market volumes look set to remain muted. However, London first-time buyer levels are hitting the desired 40% mark thanks to greater wealth in the capital. This will greatly assist transaction numbers and lead to a far more active property market in London.”
The rise in the proportion of first-time buyers who look set to enter the property market in the next 12 months coincides with an increase in those expecting house prices to be higher over the same time period. Nationally, Rightmove’s Q1 2011 survey found that 21.9% of first-time buyers expected house prices to rise over the following year. This quarter the proportion of those expecting prices to be higher in 12 months’ time has jumped to 33.3%, indicating that many first-time buyers may be choosing to take the plunge and purchase their first home sooner rather than later before prices increase.
Shipside adds: “This quarter’s survey appears to indicate more first-time buyers are calling the bottom of the market. A significantly higher proportion of them now believe prices are set to increase over the next 12 months and so they are perhaps looking to enter the property market in greater numbers before their affordability deteriorates.”
For the second consecutive quarterly survey first-time buyers expressed that their single biggest concern in the property market is raising enough of a deposit to purchase. The proportion of those expressing this view remained the same as our Q1 survey at 44%, twice has high as the second highest concern which was finding a property to buy.
Shipside adds: “It is no surprise that raising enough of a deposit continues to be the major concern for first-time buyers, and more needs to be done to assist them on this front. Initiatives such as FirstBuy are a step in the right direction, although it is limited to just new build property which doesn’t assist the wider resale market. Encouragingly, our survey found that just under 40% of prospective first-time buyers stated they would be more likely to buy a new build property as a result of this scheme.”