First-time buyer demand softened across Great Britain during the third quarter despite remaining strong in a number of major cities, according to research from Yopa.
The estate agency’s analysis finds 31.7% of properties it classifies as first-time buyer stock had been sold subject to contract during Q3, down from 32.9% in the previous three months.
That represents a 1.3 percentage point quarterly fall, while demand was 0.6 percentage points below the level recorded during the same period last year.
The figures emerge as the Government prepares to introduce Your First Home in England, which is expected to allow eligible first-time buyers to purchase qualifying new-build properties with deposits starting at 2.5%, supported by a 20% government-backed equity loan.
REGIONAL DEMAND
Liverpool records the strongest first-time buyer demand in Yopa’s analysis, with 51% of the stock measured having found a buyer.
Sheffield follows at 44.7%, narrowly ahead of Leicester at 44.6%, while Bournemouth stands at 41.7% and Manchester at 41.1%.
Leicester records the biggest quarterly increase, rising 7.1 percentage points from 37.5% in Q2. Manchester increases by 3.3 percentage points and Portsmouth by 2.4 percentage points.
Verona Frankish (main picture, inset), Chief Executive Officer of Yopa, says: “While we’ve seen first-time buyer demand ease slightly at a national level during the third quarter, the underlying picture remains mixed, with a number of regional markets continuing to demonstrate strong levels of buyer activity.”
SUPPLY CONSTRAINT
Yopa’s measure of first-time buyer stock accounts for 1.8% of all properties currently advertised for sale, marginally higher than 1.7% in Q2 and unchanged annually.
Plymouth records the largest proportion at 2.1%, followed by Southampton at 2%, Portsmouth at 1.9% and London at 1.8%.
Frankish says: “One of the biggest challenges continues to be the lack of suitable stock. Across Britain, first-time buyer homes account for only a very small proportion of all properties available for sale.”
She says Your First Home could help reduce the deposit barrier, but warns that stimulating demand specifically for new builds without addressing wider supply could put upward pressure on prices.
Frankish adds: “Increasing the supply of suitable homes remains essential if we want to improve accessibility and maintain market momentum over the longer term.”
