Number of first-time buyers falling

9 March 2010 | By Natalie Thomas

In a typical, healthy market, those buying for the first-time would constitute around 40% of all buyers and so this emerging trend is some cause for concern says Rightmove.

Miles Shipside, commercial director at Rightmove, says first-time buyers play a crucial role in keeping the market moving by helping to complete chains and their continued absence delays any prospect of a meaningful market recovery.

He says: “Even more concerning is this comes as part of an emerging trend showing the percentage of projected first-time buyers has been decreasing over the last three quarters.”

The Q1 Consumer Confidence Survey asked first-time buyers for their opinions on all areas of the housing market. The proportion of those who believed that now was a good time to buy fell for the fourth consecutive quarter to 58%, though the fact that those expressing this view remains in the majority provides some encouragement.

This can perhaps be explained by the fact that a majority of potential first-time buyers are also expecting prices to increase over the next year, with 1 in 10 believing prices will go up by over 10%.

Shipside adds: “Deposits are the greatest hurdle for first-time buyers to get over. In

the aftermath of the banking crisis, lenders have increased the deposits required but by doing so have severely restricted the number of first-time buyers. This in turn affects total sales volumes as first-time buyers are typically responsible for around two in five of all property transactions.”