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First-time buyer demand soars before stamp duty change

Friday 20th April 2012

Demand from the important first-time buyer market hit a ten-month high in March, according to the latest figures from the National Association of Estate Agents.

The association's monthly housing market report found that the percentage of sales being made to first-time buyers increased from 23% in February to 24% in March. It last reached this level in May 2011.

The report also found that on average, estate agents branches had 297 house-hunters registered per branch in March compared with 293 in February.

Sales levels were consistent with February, with branches selling seven properties on average. Anecdotal evidence from NAEA agents suggests that the increase in interest from first-time buyers in the last weeks of the Stamp Duty Holiday helped to support this figure.

Wendy Evans-Scott, President of the NAEA, said: "As our member agents predicted, the termination of the Stamp Duty Holiday helped to fuel a last-minute rush from people hoping to escape this tax on aspiration.

"It is clear that significant demand existed for this important tax break for those seeking to buy their first home. In light of these new figures, the Government's decision to remove such vital financial support for what is an extremely fragile part of the housing market seems short-sighted."

However the number of registered sellers fell slightly in March, despite recent evidence that people asking a sensible price for their property are able to make a sale. The average branch had 61 properties on its books, compared to 63 in February.

Evans-Scott said: "The slight drop in reported supply levels suggests some caution amongst sellers, who were waiting until the full facts of the Budget were established and how that might affect house prices.

"In addition, the recent move by some major lenders to severely limit the availability of interest-only mortgages is no doubt dampening the levels of supply in the market."   

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Mike Jones

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