Hopeful house buyers put off by low supply
A SHORTAGE of suitable housing is preventing potential first-time buyers from stepping onto the property ladder, according to data released this morning.
Asked to name their biggest concern about buying a home, the second most common response among potential buyers was the difficulty of finding a property.
“In the final quarter of 2011, the numbers of terraces and flats coming to market were down 31 per cent and 28 per cent respectively when compared with the previous quarter,” stated the report from Rightmove, which compiles the data.
Weak supply is partly being caused by owners failing to “trade up”, Rightmove said, due to economic uncertainty and a lack of equity.
Low interest rates and lenient policies towards borrowers with arrears have reduced the number of forced sales, also reducing supply – albeit for more positive reasons.
“For first-time buyers who are itching to get on the ladder a lack of fresh of choice in apartments and terrace properties must be extremely frustrating,” said Rightmove’s Miles Shipside.
Raising enough of a deposit for a competitive mortgage remains the most common stumbling block for aspiring buyers. “You can understand the frustration of many ‘trapped renters’ who would like to buy but simply don’t have the means to get over the deposit hurdles put up by lenders,” Shipside added.
The proportion of house-buyers over the next 12 months that will be first-time buyers has edged up to 24.3 per cent, the survey showed, yet remains “well below the historic norm of 40 per cent”.
London remains the region in which first time buyers account for the highest proportion (41.5 per cent) of likely future sales. In all other recorded regions the proportion is well under 30 per cent.