FTBs overlooked as market seeks out the green shoots of recovery

Hometrack is warning that first-time buyers are being overlooked in the clamour to hunt out the green shoots of recovery.

The latest national housing survey from the company, which polled 6,020 estate agents and surveyors, reported several positive trends in April’s data.

House prices fell by only 0.3% in April, the lowest monthly decline for a year, and the average number of weeks properties spent on the market went from 11.3 weeks in March to 10.4 weeks in April.

Sales volumes also grew by 15% and were up 70% over the last three months.

Richard Donnell, director of research at Hometrack, says those buying at low LTVs and cash in-vestors have been driving the market. But he warns that this does not mean the housing market is on the road to recovery.

He says: “Is this pick-up in activity merely a seasonal blip supported by pent-up demand or the beginning of a more sustainable trend? The market cannot operate indefinitely with just one subset of active buyers. In the rush to seek out the green shoots of recovery, the importance of first-time buyers in driving the market is often underestimated.”

He adds: “The reality is that a broad-based and sustainable recovery in the housing market needs to be supported by a broad base of buyers.

“Only when first-time buyers feel confident to enter the market in significant numbers can we start to claim any green shoots of recovery.”

The upsurge in April demand seen by Hometrack has been echoed by findings from Propertyfinder.com.

The property website’s latest confidence survey gauged the opinions of 2,345 consumers.

It found that almost half of res-pondents thought house prices would rise by this time next year, a steep rise since March when just 30% believed this to be the case.

Nicholas Leeming, director of Propertyfinder.com, agrees with the need for cautious optimism.

He says: “The survey findings support the evidence of increased buyer interest we are seeing on our website that the housing market has bottomed out.

“The exuberance of the rebound in confidence may be a little premature and we would not be surprised to see it slip back a little as the peak spring season passes.”

He adds: “The crucial first-time buyer market is feeling the pinch much more than others. This is the main reason for caution on the housing market.

“Restrictions on mortgage supply are still making it difficult for first-timers to get on the ladder. This stymies the whole market, making house-buying chains much more difficult to complete. Transactions cannot recover until those entering the market for the first time can get the finance.”