Aug
02
More first time buyers are paying asking price for properties as housing market gathers pace, experts say

A rising number of Welsh first time buyers are buying properties without negotiating on the asking price, marking the recovery of the housing market, experts have said.

According to the National Association of Estate Agents (NAEA), average sales have increased from nine per branch in April to 10 in May, a rise from the beginning of the year when the figure stood at just seven.

The NAEA has also revealed a 14% rise in the number of house hunters – an average of 313 in May – compared with last year’s figures averaging 274 per branch.

However, many first time buyers are still struggling to purchase their first property due to high prices and limited funds.

A recent study from The Office of National Statistics (ONS) showed the number of home buyers between 25 and 35 has sharply fallen from 2 million to 1.3 over the past decade.

Nearly one in three households in Wales rent their homes from housing associations, private landlords or local authorities.

According to the NAEA, the average number of first time buyers has dropped from 23% in April to 20% in May. Property website Rightmove has said asking prices rose from 0.3% month-on-month in July to reach a new peak of £253,658 on average.

In Wales, new sellers are asking around 2.4% more than a year ago.

Despite this, Government schemes have helped to improve the housing market for first time buyers with Funding for Lending and Help to Buy schemes.

In Wales, the Help to Buy scheme, beginning in January, will offer to underwrite mortgages for those with a 5% deposit in order to increase the availability of 95% deals.

Tony Jones, owner of ACJ Properties and the Welsh representative of ARLA (Association of Residential Letting Agents) said:

“The property market, particularly in areas such as Penarth and Cardiff Bay, is very competitive and many first time buyers are paying the exact price, without negotiating, to secure the right home.

“The rising number of property sales and house hunters shows that the market is improving, which is good for home buyers. However it is still very much a reality that young people are struggling to get onto the property ladder.

“The Welsh Help to Buy scheme will help those looking to buy houses in Penarth, Cardiff Bay and other desirable areas in Cardiff, by underwriting mortgages for those will smaller deposits.

“In the meantime, renting can be a positive start. The key is finding an accredited landlord, who will provide tenants with a legitimate tenancy agreement suited to their needs and requirements. This will ensure a problem free tenancy whilst they save for their first home.”