First time buyer demand improves
Demand among first timers seeking to buy a new home is increasing, while a growing number of buy to let investors are currently looking to buy new houses, according to the latest report from the Royal Institute of Chartered Surveyors (RICS).
The RICS’ survey, which looks at new buyer enquires, shows that residential demand has now improved for 11 successive months.
The study reveals that 13% of all new residential enquiries came from first time buyers with a net balance 28% of surveyors reporting that the volume of first time buyer enquiries increased in the last quarter.
The greatest proportion – 23% - of first time buyers enquired after a new home in North West, while the lowest proportion was recorded for new homes in East Anglia – just 6%.
The net balance of surveyors reporting a rise in first time buyer demand was most rapid in the South East and East Anglia at 56 percent and 43 percent respectively. However, surveyors in Yorkshire and Humberside and the North reported falls in first time buyer demand over the previous three months.
A greater number of surveyors also reported that buy to let investors are generally now far more interested in buying new houses, rather than new flats. However, the situation in London is very different.
A positive balance of 8% more surveyors reported higher demand for new flats in London compared to a negative balance of 16% for those investors looking to buy a new house.
Simon Rubinsohn, RICS chief economist, commented: “House price falls and lower interest rates have gone some way to tempting first time buyers back into the market. However, buyers still need to have greater deposits to access the market with lenders remaining generally cautious. This is making it hard to translate this interest into hard transactions. Meanwhile, the firmer tone to the market has also rekindled enquiries from buy to let investors albeit in a more measured way than was visible prior to the onset of the credit crunch”
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