Steep drop reported in first-time buyers
16 June 2003
The number of first time buyers is continuing to plummet, according to a report by the National Association of Estate Agents (NAEA).
The NAEA figures show that only 14 per cent of agreed sales during May were first-time buyers, down from 18 per cent in April.
The industry group suggests that the data indicates young workers are being priced out of the property market and are finding it increasingly hard to get a foot on the ladder.
The figure for May is the lowest since 2001 and has fallen sharply from the 21 per cent of first-time buyer sales seen at the beginning of the year.
NAEA president Melfyn Williams commented, 'Clearly the present absence of first-time buyers suggests that many homes are unaffordable for most young prospective buyers.
'However reports from our members suggest that the young are not staying at home with their parents, but are choosing to rent instead. The lettings side of many estate agency businesses has been booming this year.'
The NAEA reports that market activity remained 'flat' in May and estate agents were reporting an average of just 12 new sales over the month.
House prices appear to have moderated sharply since the start of 2003 and have risen by an average eight per cent during the past 12 months, compared to an average 18 per cent in the 12 months to the end of the January.
Properties are taking an average of seven weeks to agree a sale and nine to exchange contracts and sellers are currently obtaining 95 per cent of the asking price, down by one per cent on last month.
The NAEA believes that this 'quiet phase' will remain below 2002 levels for some time but that the likelihood of a housing market crash is very slim. The organisation suggests house prices may rise again by the end of the year.