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First time buyers up 45pc year-on-year


The amount of people buying a first home in the UK has risen by 45pc year-on-year from July 2012, according to a report by LSL Property Services. There were a total of 26,100 transactions for buyers of first homes in July, up 8,100 from July 2012, and the highest monthly total since November 2007.

First time buyers are being encouraged to buy a home due to the availability of cheaper credit provided by government schemes such as Funding for Lending and Help to Buy.

However, year-on-year the average price of a first home has also risen, buy a margin of 8pc, and will now cost a first-time buyer £146,726. This has done little to put people off, though, and figures show that 49pc of tenants renting a property expect to buy a house in the next five years. This is a rise of 13pc compared to December 2012.

However there have been warnings that the rate at which house prices are rising may cause future buyers to be priced out of the market, and we could again end up in a situation where few are able o afford to buy a first home. Prices are set to rise further and faster as demand for housing increases, and the rate at which new houses are being built fails to keep pace. This would represent a case of demand surpassing supply.

David Newnes, Director of LSL Property Sales, said: “Mortgages are much more affordable for first-time buyers compared to last year, which has opened the door to thousands of would-be buyers who were shut out of the market.

“But there is a down-side to the good news. There is simply not enough housing stock to match continued demand. If supply fails to keep pace with demand the housing market will become increasingly unsustainable”, he continued.

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