The number of Britons planning to buy a home for the first time has increased as the prospect of falling prices bolsters demand, Rightmove Plc said.
The likelihood of a contraction in UK house prices in the near future is leading to an increase in interest from first time buyers according to Rightmove plc.
26% of respondents to a survey by the UK’s largest property portal in October were first time buyers intending to purchase within 12 months. This is an increase on the 22% recorded in the same survey in July.
While some house price index have shown prices falling for the past 6 months it is only in the last 2 months that falls have been recorded almost across the board. However, the consensus of opinion is that more falls lie ahead, with supply rising and demand falling.
Supply has been rising since the government abolished the Home Information Pack allowing anyone to market their home without having to fork out over £100, meanwhile the government austerity measures planned and announced are causing demand to fall as buyers adopt a wait-and-see strategy. The worst of the austerity is the government plans to cut at least half a million jobs in the public sector, this is cutting demand now due to fear and uncertainty, and will also increase supply when the chop eventually comes.
According to Rightmove this is being reflected in the opinions of first time buyers, the portal said that 32% of first time buyers surveyed are expecting values to drop in the next year, up from 20% in July.
While the data — which is part of of Rightmove’s fourth-quarter consumer-confidence survey of over 25,000 people, is encouraging — the portal also revealed that the number of first time buyers in October was down 28% compared to last year.
It is little wonder; according to National Housing Federation’s Home Truths report, in order to buy an average priced home in London, a first time buyer still needs to have an annual income of almost 100,000 pounds. To buy even a home valued in the bottom quartile in London the annual salary needed comes down to 50,000.
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