First time buyers are being squeezed further out of the market, with house sales by this group down five percentage points, a twenty per cent decrease in the last month alone, according to the National Association of Estate Agents (NAEA).
The NAEA’s June Housing Market Report shows the number of first time buyers dropped to 20 per cent, down from 25 per cent in May 2014 (a five per cent decrease), the lowest level recorded since May 2013. The first time buyer struggle is reflected in the age of this month’s house buyers, as those aged 18 to 30 represented just three per cent of all house sales in June, the lowest percentage of young house buyers recorded by the NAEA to-date.
Nearly 80 per cent of NAEA member agents believe the recent announcement by the Bank of England governor, Mark Carney, on the cap on high-risk mortgages, which will see only 15 per cent of new mortgages at 4.5 times a borrower's income, will affect the number of first-time buyers and home owners looking to move.
Mark Hayward, managing director of the NAEA, said: “Things are getting even tougher for first time buyers. Not only do you now need to stump up ridiculously large sums of money in terms of deposits and stamp duty to be able to get on the ladder, but new rules mean buyers will also have to prove they can easily afford repayments now and in the future. Alongside this, a scaling back of the governments Help to Buy scheme and the implementation of the MMR in April will also have a significantly negative impact on the first time buyer market.”
There is some good news in this month’s NAEA housing report, as June saw an increase in the average number of properties available per NAEA member branch. Available properties increased to an average of 46 compared to 44 in May 2014. The number of properties available per member branch is still historically low, and has not reached above 50 per month since November 2013, and above 60 since May 2013.