First-time buyers are seeing their dreams of homeownership hindered by a lack of suitable property for sale as well as raising a big enough deposit, Rightmove claims.
The proportion of buyers who intend to purchase their first home over the next year has edged up to 24.3%, up 1.4% on last quarter and 1.5% year-on-year.
But Rightmove, which advertises around 90% of homes currently for sale in the UK market, also said the number of new properties advertised for sale in the final quarter of 2011 was significantly down on the third quarter, with flats and terraces in short supply.
Around three in 10 first-time buyers said finding a suitable property to buy was their single biggest concern.
Meanwhile raising a deposit is still the single biggest concern for four in 10 and was the most common problem reported.
Miles Shipside, director at Rightmove, said: “First-time buyer levels remain well below historic norm of 40%, but a slight increase of 1.4% on last quarter of those intending to buy for the first time offers some encouragement for the year ahead.
“The main issues of affordability and mortgage availability that have blighted first-time buyers over the last few years remain.
“Our research also provides evidence of an emerging new home-ownership challenge in the form of a lack of available properties that would typically be brought to market by first-time sellers.”
In the final quarter of 2011, the numbers of terraces and flats coming to market were down 31% and 28% respectively when compared with the previous quarter.
Shipside added: “For first-time buyers who are itching to get on the ladder a lack fresh of choice in apartments and terrace properties must be extremely frustrating.”
He suggests that owners of these property types, typically first-time sellers, are being deterred from bringing their property to market because a continued policy of forbearance by lenders and low interest rates means that the market is short of forced sellers.
And he said: “Those wishing to trade up are suffering from a lack of equity, lack of confidence to stretch themselves financially and, in certain micro-markets, difficulty in identifying a suitable property that they would like to move to.”
Rightmove’s research also showed around one in 12 (8%) is concerned about their ability to meet the monthly repayments of a mortgage.
Only around one in 14 (7%) identified concerns around fluctuating house prices.
Rightmove said that movements in house prices are not seen as a significant barrier is interesting given that 59% of the sample indicated that they believed average asking prices in their area are currently above what they consider to be fair and reasonable.
Shipside said: “With interest rates keeping monthly mortgage repayments comparatively low and fierce demand in the rental sector keeping the monthly rents high, 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.”
David Sansome, Managing Director at Sansome & George said: ”The difficulties facing first time buyers have been well documented over the last couple of years and still largely exist today. It is however a fact that property affordability has improved in that time and many first time buyers have now been able to save a deposit and put themselves in a position to buy.
It may be some time before we see the number of first time buyers return to historic norms but I do expect the position to move forward in 2012 and beyond.”
