First-time buyer numbers rose by 40% in the year to the end of August and are now 1% higher than they were in August 2007, according to Connells Survey & Valuation.
But some housing commentators urged caution, amid fears that some buyers are at risk of falling into negative equity.
August is typically a slow month for the housing market, with Connells typically seeing 4% fewer new buyer valuations in August than July over the last five years. But this August there were 4% more first-time buyer valuations than the previous month.
All residential valuations were up 39% last month, compared to August 2012, and up 1% on July 2013. Home mover valuations rose almost as much as those for first-time buyers at 3% between July and August, and up 32% year on year.
Connells said remortgaging activity experienced the largest slowdown in August, with a 4% monthly fall, but it pointed out valuations in August were still 49% higher than a they were in August 2012.
Buy-to-let valuations dipped slightly in August – by 2% compared to July – but the seasonal decline was less dramatic than the 7% monthly drop seen a year earlier. And on an annual basis, there were 33% more buy-to-let valuations in August than there were 12 months earlier.
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John Bagshaw, corporate services director at Connells, said: "The UK housing market went into hibernation five years ago, and we’ve had to wait a long time and work through considerable developments to see some significant positive trends emerging since. Helped by the Funding for Lending Scheme and Help to Buy, thousands of new buyers are overcoming huge obstacles from wage freezes, inflation and lower saving rates, turning long pent-up dreams to buy into reality."
Commenting on the outlook for the first-time buyer market, Mark Harris, chief executive of mortgage broker SPF Private Clients, said: "The mortgage guarantee element of the Help to Buy scheme, due to be introduced in January, will enable first-time buyers with just a 5% deposit to access competitive mortgage rates when buying a period home as well as a new-build so is likely to be incredibly popular. We expect to see more first-time buyers as a result of this.
"However, it's important not to get carried away. Any increase in the number of first-time buyers is from a very low base and there is a long way to go before we can say that the market has recovered."
Property expert and independent home buyer Henry Pryor, is even more cautious: "If you run a free bar at a party then some people are going to get drunk. House prices are fuelled by cheap credit and the government seems determined to keep credit cheap at least until the next election in 2015.
"First-time buyers, the foundations of the housing market had been struggling to find the necessary larger deposits needed to qualify for a mortgage. Help to Buy has to some extent in phase 1 (and will certainly from January), mean that they don't need to find typically 25% and can therefore buy something today that they would otherwise be unable to afford.
"Just as too much free drink leaves a hangover, so it may well be when eventually these initiatives are withdrawn. Not only will future first-time buyers find themselves having to save for longer before they can buy but values are more than likely to fall back leaving those buying today with a pretty grim housewarming present – a dose of negative equity."