First time buyers remain constrained by a lack of available mortgage finance, despite the fact that house prices fell by 10.1 per cent between April 2008 and 2009, the latest house price index from Hometrack has revealed.
According to the survey, which covered more than 4,000 agents and surveyors across the nation, the power of first time buyers is being underestimated by both the Government and mortgage
Commenting, Richard Donnell, Hometrack's director of research, said: "Only when first time buyers feel confident to enter the market in significant numbers can we really start to claim any 'real' green shoots of recovery."
According to the survey, the number of house sales rose by 15 per cent in April, an increase of 70 per cent over the last three months, but the majority of these were not first time buyers, who remain "affordability constrained."
Commenting on the increase in sales volumes, and lack of first time buyers, Mr Donnell said: "The market can not operate indefinitely with just one sub-set 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."
Meanwhile, Alistair Darling's Budget did little to rectify the housing and mortgage market problems, Mr Donnell added: "This week's Budget offered little real hope for the housing market and in highlighting the scale of pressure on public finances in the years to come, re-confirms the continuing economic uncertainty to homeowners."
It is for these reasons that Hometrack sees the increase in house sales as seasonal and not a sound indication of recovery, "demand is set to remain constrained and we expect to see small monthly price falls over the rest of 2009 and into 2010," Mr Donnell concluded. Get mortgage quotes and advice »
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