Most first-time buyers are purchasing on their own

OVER half of all first-time buyers are now buying on their own, according to a recent national survey by the Real Estate Alliance.

Interviews of 500 clients in a network of offices across the country gives an interesting and fairly accurate picture of the property market at the moment.

Not surprisingly, the first-time buyer has retreated from its former dominant position to 30% of the current market, with the trader-upper holding top position at 35%.The final segment is held by the investor, who, at 28% is using the downturn to increase property portfolios.

Price and location emerged as the most important criteria for buyers and over 60% of those interviewed did not want to be more than 45 minutes from their place of work. Proximity to schools, shops and other amenities were also important factors.

Interestingly, those interviewed weren’t too pushed about the type of property they purchased, (the classic v minimalist: old v new debate), provided the price and location were right.

And buyers weren’t worried about orientation, garden size, eco-credentials and architectural style. The two segments of the market who professed an interest in modern properties were the FTB’s (First-Time Buyers) and downsizers.

And, the rather lazy approach to purchasing that’s symptomatic of the present market, will be further underlined by the fact that 60% of the interviewees feel property prices will drop even further this year.

Another 40% expect interest rates to rise, but the majority of respondents felt there was good value at the moment.

The vast majority of buyers said they would need financial support from the banks, but at least 40% had not yet approached a lender.

Another interesting statistic was the strength of the rental market: a quarter of the trading-up group plan to rent, rather than sell their existing properties.

And another report by the Director of the Construction Industry Federation’s Southern Region, Joe O’Brien, could come under the provisional title of ‘Reasons to be Cheerful’ — or even, ‘He would Say That, Wouldn’t He’.

The CIF report highlights a number of points which will help propel the FTB market this year.

The change in the stamp duty regime and the increase in mortgage interest relief are top of the list, followed by the good value with dropping price levels and an improvement in affordability.

The rent-a-room scheme is also cited, as is the expected hold-off in interest rate rises.

Continued population growth, allied with a drop in the number of completions annually should create stability in a correcting market.

Nice and neat, isn’t it? And as Joe O’Brien and the CIF are no fools, they add this last line as a codicil:

“CIF remain positive about the housing outlook for 2008, for all the reasons outlined: 2007 was a challenging year; however, the key issue of buyers’ confidence will ultimately determine whether we have a positive year for house building in 2008.