House sales to first-time buyers have risen to a two-year high, according to the latest research.
The First-Time Buyer Tracker from Your Move & Reeds Rains has reported a surge in transactions from first-time buyers: 32,300 first-time buyers bought a home in April 2016 – the highest figure since June 2014.
The rise in transactions comes in the wake of the 1 April deadline for buy-to-let landlords to complete transactions before the stamp duty hike of 3% on additional properties came into effect.
April’s figure is up 14.9% on the previous month, when 28,100 first-time buyers bought a home. Compared to January 2016, the number of transactions has risen by a whopping 50.9%, when just 21,400 buyers bought their first homes.
Compared to a year ago, completed transactions by first-time buyers have risen by 37.4%. April 2015 saw just 23,500 first-time buyer completions, meaning 8,800 more first-time buyers got on the housing ladder this year.
Adrian Gill, director of estate agents Your Move and Reeds Rains, says: “This surge in sales shows that demand is steadfast among first-time buyers – despite upward movement in house prices. In the short term, first-timers may be finding that competition for properties has eased slightly following a period of intense pressure on landlords to meet the stamp duty surcharge deadline at the beginning of April.
“With a chronic shortage of homes, one man’s loss is another man’s gain. Subdued landlord demand, following the changes, is offering some temporary light relief to first-time buyers. Less competition from landlords expanding their portfolios means more houses to buy for first-timers,” he adds.
However, it seems that first-time buyers are paying more for their first home, spending an extra £20,000 on a property compared to a year ago. First-time buyers spent £168,656 in April 2016 compared with £148,483 in April 2015 – a difference of £20,175, or 13.9%.
Rising house prices have also pushed up the average deposit first-time buyers paid over the last 12 months. First-time buyers paid on average £27,290 as a deposit – £3,300 (13.8%) more than the £23,990 paid in April 2015.
Unsurprisingly, given the high property prices in the capital, first-time buyers in London paid more for their homes, spending an average of £322,613 in the three months to April 2016. First-time buyers in the South East also paid more than average for their property at £215,444.
In other areas of the UK, prices for first-time buyers were below £200,000. Northern Ireland was the cheapest region, with an average price of £99,860 paid by first-time buyers in the three months to April 2016 – the only region where a first home was, on average, less than £100,000.
When it comes to areas first-time buyers head for, the South East was the most popular with 16,300 buying a property in this region in the three months to April. This was followed by London, which had 11,300 sales, the North West (8,500), Scotland (7,500) and the West Midlands (7,000).