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It appears that the continuing rise in house prices and numerous reports on affordability have not deterred first-time buyers from entering the market.
According to new research from Connells, 49% of all property purchase valuations carried out in July were made on behalf of first-time buyers, a figure which has risen 6% on the five-year average.
The latest Survey and Valuation report from Connells detailed a considerable rise in transactions from first-time buyers as it showed 36,000 loans taken out in the month of June, this is the highest number seen from the demographic in 11 years with a huge 22% month-on-month rise and 6% year-on-year.
Corporate Services Director, John Bagshaw, commented on the findings of the report, stating that “Demand from first-time buyers is supporting the housing market at the moment. People are eager to get on the property ladder, with record high employment and competitive mortgage rates. But this doesn’t mean it’s an easy task to get a foothold in the market. Economic conditions are still tough”
Bagshaw suggests that while many first time buyers are eager to get on the housing ladder, the market can still be tough and feels they should receive further assistance; “With the value of a typical property rising £10,000 in a year, first-time buyers still need help. Perhaps they could be given an exemption from stamp duty”
This recent report also shows that there has been a small drop in new landlords entering the market, and suggests that “Government policies, including the stamp-duty surcharge and reduction in buy-to-let mortgage relief” have most likely made potential new property investors slightly hesitant to get involved in the buy to let market.
“People are still investing in the buy to let sector, but they’re typically existing landlords looking to expand their portfolio and increase profits to offset increasing tax bills. But the stamp duty surcharge, combined with the reduction in buy to let mortgage tax relief is potentially dissuading new small scale, amateur landlords from entering the market,” Bagshaw added.
The property market has also seen a rise in remortgaging to 36%, 10% higher than the five-year average as consumers are securing more long-term fixed rate deals as they take advantage of the competition amongst lenders when refinancing their home.