"It does seem as though there are a few boosts on the horizon for first-time buyers who have their sights set on getting on the ladder in the next few years."
In May, the number of people looking to buy a new home continued to rise, with 32% more respondents noting an increase from prospective buyers. However, supply cannot keep up with this increase in demand, as a net balance of -21% respondents reported another fall in the number of new listings being brought to market.
This widening disparity between new buyer enquires and new instructions sees the gap at its widest since November 2013. The RICS data suggests however, that sales instructions could improve over the coming months, as survey participants are reporting that the number of market appraisals being undertaken is up on a twelve-month comparison.
As the market sees the impact of people trying to beat the stamp duty holiday coming to an end, newly agreed sales rose once again. This month, +30% of respondents reported an increase, but this is down from +47% in April. Looking further ahead, whilst respondents expect sales to continue to rise in the coming three months, they do so at a lesser rate than reported in previous surveys.
The ‘sales boom’ is not anticipated to last, as sales expectations for the coming twelve months have now turned flat, suggesting that the stamp duty holiday is the primary driving force behind the latest market trend.
However, current market conditions suggest that there is no sign of house price inflation losing any steam. The national house price net balance rose to +83% in May, up from +76% in April and is the fourth successive month in which upward pressure on house prices has intensified. All parts of the UK show that house prices have risen.
In addition, +45% of respondents envisage house prices to rise in the coming three months. Respondents also anticipate that prices will rise for the year ahead, as 64% more respondents anticipate an increase.
Sundeep Patel, director of sales at Together, commented: “With both house price growth and prices up again in May, the demand for property continues to pick up the pace ahead of the summer months. House prices rose to +83% in May, up from +76% in April and 32% more respondents noted an increase from prospective buyers.
“Although, with today’s data showing -21% of respondents reported another fall in the number of new listings being brought to market and Andy Haldane’s, chief economist at the Bank of England, remark earlier this week about the UK property market being “on fire” - only reconfirms the widely reported market concerns over future supply and demand issues.
“That said, with the Government’s First Homes scheme now launched and the new Planning Bill to prop up more regional housebuilding, it does seem as though there are a few boosts on the horizon for first-time buyers who have their sights set on getting on the ladder in the next few years. Specialist lenders will be crucial in supporting buyers’ property plans as we expect there to be more demand for flexibility post pandemic, to meet borrowers’ evolving circumstances."
