First time buyer numbers 'to pick up'

04-Sep-2007

The number of first time buyers entering the property market fell over the past quarter, but is expected to pick up again as prices continue to stabilise and interest rate confidence rises, the Haart estate agency has revealed.

Two thirds of the estate agency's branches have seen some form of decrease in first time buyer numbers over the past three months, but the number of buyers as a whole rose slightly over the same period, the Haart Quarterly House Market report reveals.

Annual price growth fell from 6.59 per cent in February to 5.46 per cent in August, the survey added.

"Following a prolonged period of extremely buoyant growth, house price inflation has begun to slow across the UK, as the succession of five interest rises since last August begins to take effect," commented Haart estate agents chief executive Paul Smith.

"With buyers now increasingly price sensitive, sellers have lowered their expectations on achievable price," Mr Smith added.

The Bank of England is widely expected to keep interest rates at 5.75 per cent when the Monetary Policy Committee meets later this week.

"The effect of several interest rate rises seems to be to stabilise house prices. Many first time buyers see this as an opportunity to step onto the property ladder even though monthly mortgage payments might be higher, whilst others see the reduction in house price increases as a sign that there is less urgency to take that first step," commented Helen Adams, managing director of first time buyers' advice website FirstRungNow.com.

"First time buyers need to take a long term view of property ownership and decide when is the best time to buy a first home. Those who think they wouldn't be able to afford it should look at all the options open to them. They might be pleasantly surprised," Ms Adams added.

The Bank of England is widely expected to keep interest rates at 5.75 per cent when the Monetary Policy Committee meets later this week.

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