Connells Survey and Valuation have reported that First-time buyer home purchases are increasing as a percentage share of the purchase market and now stand at nearly half 49%. This is an increase of 6% on the five year average from July 2016.
However, Buy to Let purchase activity has declined over all with a marked decrease in new landlords entering the PRS with purchasing activity falling back to 62% of the market.
Connells report that record employment levels and competitive mortgage rates are fueling demand from First-time buyers, but that deposits and new MMR affordability rules still make it difficult to get in to the market.
Corporate services director of Connells Survey and Valuation, John Bagshaw, said: “Economic conditions are still tough. The increasing cost of living and house price inflation are making it harder to save for a deposit. House prices are around eight times higher than earnings, and they’re rising twice as fast.
“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?”
On the decline in new landlord purchase instructions Bagshaw said: “People are still investing in the buy-to-let sector, but there are typically existing landlords looking to expand their portfolio and increase profits to offset increasing tax bills. 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.”
“As housing policy is no longer entirely focused on increasing homeownership with the Government accepting the need for a healthy rental sector, they should think again about policies which hold it back. Of course, a serious step-up in house building would help everyone in the market.”