First-time buyers are bearing the brunt of uncertainty in the mortgage markets according to a new report from the National Association of Estate Agents (NAEA).
The NAEA has found that demand among other areas of the mortgage sector was still positive and that the number of properties available has risen, but the number of confirmed sales has fallen.
First-time buyer market share fell to 8.3 per cent in March compared with 11.7 per cent in February as the impact of the credit crunch continues to be felt. This is a 12.6 per cent decline compared with March 2007 and is the lowest figure since April 2006, when first-time buyers accounted for just 7.9 per cent of home buyers.
According to the NAEA, the fall in first-time buyer mortgage
uptake is largely a consequence of the falling number of mortgage approvals as fixed-rate deals and 100 per cent mortgage offers are withdrawn. President of NAEA, Stewart Lilly, said: "The global credit crunch, squeeze on mortgage
approvals and the media cloud that currently surrounds the property market are undoubtedly having effect on individuals' decisions to buy or sell.
"There is a constant need to remind people that the underlying factors that hold-up the property market – low unemployment, historically low interest rates and a pent-up demand for houses – still exist. In fact, a number of NAEA agents from across the United Kingdom are still reporting stable property markets with many of their branches making steady sales."
NAEA members reported an average of 249 property buyers on estate agents' books in March, up slightly from 243 in February. However, this figure is significantly lower than the 385 potential property buyers recorded in March 2007.
There was also a slight monthly increase in the number of properties on agents' books with NAEA members reporting an average of 76 properties for sale in March compared with 74 in February. This figure was also higher than in the same month last year, when 62 properties were up for sale. Property sales continued to fall in March with on average seven sales reported per agent, compared with eight in February and 14 in March 2007.
Most of the NAEA regional summaries reported a lack of confidence in the financial markets and slower sales, particularly among first-time buyers. However, Hereford and Worcester representative Joanna Cobb said there has been a small improvement in activity in the Herefordshire area, while Michael Jones from the South Wales region said that there was "plenty of viewing activity" and that "sensibly priced properties are selling".
Mr Lilly concluded: "There are indications that first-time buyers have dropped their market share once again showing a "wait and see" attitude has been adopted. Over the next few months it is imperative that the shackles are released on the mortgage market so consumer confidence can be rebuilt, allowing the market to stabilise."