First Time Buyers in the UK Market 'Bounce Back' After Previously Low Activity

    LONDON, ENGLAND, July 06, 2012 /24-7PressRelease/ -- According to figures from LSL Property Services transactions from first time property buyers rose by 28% in May (to 16,170). This resurgence in sales followed a steep decline in April, prompted primarily by the removal of stamp duty relief for first time buyers.

The encouraging figures reflect the an overall trend towards greater affordability for first time buyers, both in terms of deposits and mortgage repayments. The LSL Property Services report identified that deposits, as a percentage of annual income, dropped from 71.8% in April to 71.6% in May. More notably, mortgage repayments as a percentage of annual income, dropped from 21.6% in April to 19.6% in May.

According to David Newnes, Director of LSL Property Services, "The market is now being driven by buyers with enough money to absorb the additional tax burden. While the number of tenants able to leave the private rental sector remains historically low, those that can are taking the opportunity to enjoy the currently highly affordable mortgage rates on offer."

The report identified that the average first time buyer in the UK was aged 28 with an annual income of GBP36,069. The most popular type of property sought by first time buyers was houses with two or more bedrooms, followed by two bedroom apartments. In terms of raising funds for deposits only 39% of first time buyers were entirely self-funded, with a high proportion still relying on assistance from family members.

Whilst the report does recognise that affordability in general is still an issue in the UK housing market, it also reflects an underlying confidence in property as a long term investment.

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