First Time Buyers Take Advantage of Reduced Competition in Market

First time buyers are taking advantage of reduced competition in the UK property market, as demand for housing dropped in February, according to the latest Housing Report from NAEA Propertymark (the National Association of Estate Agents).

Housing demand

The number of home hunters registered per NAEA Propertymark member estate agent branch dropped by 15% in February, from an average of 297 in the previous month, to 252.

This is the lowest figure recorded since July 2013, when agents registered an average of 250 prospective buyers per branch.

Annually, demand for housing has dropped by a fifth (18%), from an average of 209 potential buyers in February 2018, alongside a decline of more than two-fifths (41%) from 2017 and 46% from 2016, when 463 home hunters were registered per branch.

First time buyer sales

First time buyers took advantage of reduced competition in the market last month. As demand fell, sales to this group rose, hitting a seven-month high of 30%.

The last time that first time buyers experienced this rate of sales was in July 2018, when they benefitted from the annual summer lull.

Month-on-month, the number of sales to first time buyers increased by four percentage points, from 26% in January.

Property supply

The supply of available properties for sale fell from an average of 36 homes per member branch in January to 34 in February.

This figure has not changed significantly from February last year, when 35 properties were available to buy per branch.

Agreed sales

The amount of sales agreed increased in January and remained high in February, with an average of seven recorded per branch.

Year-on-year, this dropped slightly, from an average of eight in the same month of 2018. 

Mark Hayward, the Chief Executive of NAEA Propertymark, says: “With demand at a seven-year low, buyers are approaching the market with caution. As we move into spring, we would usually expect to see an increase in activity, but house hunters are evidently delaying their plans until the impact of Brexit is clearer. Over the last seven months, however, we’ve seen periods where first time buyers have taken advantage of reduced competition and driven their transactions forward, and this really picked up in February.

“The next few months will be very telling – will activity pick up once there’s further clarity on what Brexit means, or will it push the housing market into a deeper pool of uncertainty? Time will tell, but, in the meantime, both buyers and sellers should feel positive. There are still house hunters searching for properties and there are still new homes coming onto the market.”