Partner Article

UK Property Market Sparked by First Time Buyers

It is common knowledge that the state of the UK property market is underpinned to a certain extent by the ability of first time buyers to get a foot on the property ladder, which then stimulates movement further up the chain.

There has been a period of stagnation where these elusive property newbie’s seemed to disappear almost completely as funding criteria tightened dramatically. It is therefore refreshing to note that an increase in first time buyers has sparked a degree of optimism and injected new life into the property market at the start of 2013.

Positive start to 2013

According to the latest Housing Market Activity Report commissioned by Connells Survey and Valuation, stronger market conditions resulted in a fourth consecutive month of annual growth in valuation activity. There was an impressive 39% growth in residential valuations for January 2013 compared to the same period last year and this resulted in a 16% overall increase in total valuations activity since December.

There is a normally a naturally slow build up in activity following the festive break but the figures show a faster and vastly more positive start to this year when compared to the start of 2012.

First time buyers pulling their weight

Credit conditions appear to be showing definite signs of easing and as a result of improved lending conditions first time buyers have certainly been pulling their weight in boosting the overall level of positive activity in the property market. From the latest figures collated by Connells, it appears that nearly one third of the valuation instructions in January were related to first time buyers which is a 24% increase on December and represents a highly encouraging increase of 40% more new buyers than were seen in January 2012. The other important factor to consider is that the trend is starting to appear sustainable as January’s increase represented the fifth consecutive month of comparable annual growth.

Improving conditions

Whilst there are incentives around such as the FirstBuy scheme which is specifically aimed at increasing the chances of first time buyers gaining entry into the property market there are also signs that established home owners and those with significant equity are being encouraged to consider moving with lending conditions becoming more favourable. Introducing more first time buyers into the general mix can only have a positive effect on the housing market in general.

Looking ahead

It certainly appears that the number of intending home buyers who will be purchasing a property for the first time is at its highest level for nearly three years and after about five years of relative stagnation and a general downturn in conditions and values, this is very welcome news indeed. We are seeing a new breed of home owner who is fully prepared to embrace what are perceived to be almost a new set of rules relating to home ownership and face up to the challenges ahead, where making money out of property is not an automatic right or a something that may happen as quickly as before.

The housing market in general needs this upward trend in first time buyer activity to continue as they perform an essential role at the bottom of the property market food chain by allowing sufficient movement to take place further up the ladder. First time buyers can certainly be given credit for sparking the latest wave of optimism and it is good news for almost anyone who owns a property.

John Darling ran his own construction company for many years. An avid blogger, he has since retired, but enjoys sharing his know how with others on the web. To learn more about managing or running construction companies, just visit glenigan.com.

This was posted in Bdaily's Members' News section by Leonardo Dawson .