Demand from prospective buyers looking for a new home jumped by over 37 per cent last month, new figures show.
In the usual New Year spike in property market activity, the number of would-be buyers rose from 268 per estate agent branch in December to 367 last month, NAEA Propertymark said.
Meanwhile, average house prices dipped by 1.12 per cent last month to £245,742, but year-on-year grew by 0.8 per cent, separate findings from the Mortgage Advice Bureau reveal.
In demand: Demand from prospective buyers looking for a new home jumped by over 37 per cent last month
The number of prospective buyers seen last month was the highest since September 2017, when there were 394 registered potential buyers on estate agents’ books.
With demand on the up, January saw an influx of sellers listing their properties, with supplies of homes going up for sale increasing from 33 in December to 36 last month, NAEA Propertymark said.
UK Finance figures published earlier this month showed that the number of first-time buyers reached the highest level for a decade last year, with 356,000 taking their first property plunge, marking a 7.4 per cent increase on 2016.
But, in yet another twist to the first-time buyer tale, NAEA Propertymark suggests ‘increased competition’ looks set to take its toll this year, with sales per estate agent in this category already falling from 32 per cent in December to 27 per cent in January.
Mark Hayward, NAEA Propertymark’s chief executive said: ‘As we usually see in January, buyers and sellers have re-entered the market after the festive slow-down and triggered an uplift in the number of sales agreed.
‘While this is good news for the market generally, the increased competition seems to have affected first-time buyers, who generally have less bargaining power when it comes to bidding for properties.
‘Our members have noticed FTBs holding off on making purchases typically outside of London, and saving for longer to maximise the full stamp duty relief.
First-time buyers: UK Finance figures published earlier this month showed that the number of first-time buyers reached the highest level for a decade last year
Official data: In its latest house price index published earlier this month, the Office for National Statistics revealed that property prices increased by 5.2 per cent in the year to December
‘They’re skipping the “first time home” and moving straight onto their second homes, to avoid growing out of their property in four or five years and facing the cost of stamp duty. This is a smart move and an example of how FTBs are making legislation work to their advantage.’
The MAB’s latest National Mortgage Index, meanwhile, revealed that the average first time buyer mortgage increased by 2.3 per cent to £129,917 last month.
Taking the property market in its entirety, transaction volumes were ‘encouraging’, the MAB said. HMRC reported that the number of properties sold last month was broadly similar to those in January 2017, ‘underscoring again that it was very much “business as usual”.’
The average mortgage in Scotland increased by 1.9 per cent last month, up to £159,120. At the other end of the scale, in Greater London the average mortgage loan slid by 1.8 per cent last month to an average of £317,595.
In its latest house price index published earlier this month, the Office for National Statistics revealed that property prices increased by 5.2 per cent in the year to December.
The rate of growth has slowed since mid-2016, but hovered at around the 5 per cent mark last year.
For mortgage holders, all eyes will be on the Bank of England’s Monetary Policy Committee meetings this year, with two interest rate rises potentially on the cards. While this will be good news for savers, those with mortgages will need to keep abreast of the best deals.