Demand for property in the UK from first time buyers is rising, while buy to let investors are now gravitating towards houses rather than flats, according to new research. New questions added to the monthly buyer enquires report from the Royal Institution of Chartered Surveyors give an insight into what is happening in specific parts of the real estate market for the first time.
The aim was to find out about the proportion of enquiries coming from first time buyers and whether surveyors are now seeing a rise in buy to let investment.Overall the report shows there has been a positive net balance for the last 11 consecutive months in property enquiries. Some 13% of new inquiries were from first time buyers with a net balance of 28% of surveyors reporting that the number of first time buyer enquiries had increased over the past three months.
The North West recorded the highest proportion of first time buyers at 23%, while the lowest proportion was recorded in East Anglia with only 6%.
The results of the survey also suggest that 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 % and 43% respectively. However, surveyors in Yorkshire and Humberside and the North reported falls in first time buyer demand over the previous three months.
Surveyors were asked for the first time how buy to let demand had changed in relation to both houses and flats. A net balance of 2% more surveyors reported a rise than a fall in buy to let enquiries and interest was generally stronger for houses than flats.
London bucked the trend by reporting a positive balance of 8% more surveyors reporting higher rather than lower demand for flats compared to a negative balance of 16% for houses. ‘This is arguably a reflection of the different nature of the London rental market and the cost and availability of houses in the capital,’ the report says.
The increased demand from first time buyers is regarded as encouraging but a lot still needs to be done in terms of finance. ‘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,’ said Simon Rubinsohn, RICS chief economist.
‘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,’ he added.