UK Housing Market Update

First Time buyers overtake Home Movers as largest buyer type


House prices rose 0.3% in January, according to Nationwide. This put annual growth at 0.1%, the lowest figure for 6 years. In part this is because January 2018, the strongest month of last year, has dropped out of the annual growth number.

The RICS Survey reflects this slowing growth. The number of surveyors expecting price falls increased for the 6th consecutive month and near-term sales expectations were at their lowest level since the series started in 1999. Numbers of new enquiries and instructions continued to fall, although slightly fewer surveyors reported falls than in the previous month. Transaction numbers remained largely flat in November for most regions, except in Wales, which saw a modest increase, and London, which continued its gradual downward trend.

Transaction numbers have been boosted in recent years by rising numbers of First Time Buyers and they are now the largest buyer type, having overtaken Home Movers. The last time First Time Buyers were the largest buyer type was 1995. They have been strongly supported by government policy, notably Help to Buy, while Home Movers have struggled to climb the housing ladder. The high street banks remain keen to grow their lending to this group. Lloyds recently announced a new 100% mortgage for First Time Buyers, to be secured by a family member opening a savings account, a move that seeks to further capitalise on the ‘Bank of Mum and Dad’. Competition for borrowers was also reflected in slight falls in the average interest rate on fixed term mortgages between October and November last year.