March 2015

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First-time buyers demand housing action as half are forced to consider homes with no natural light

First-timers increasingly willing to compromise living space to get on the ladder: 51% say natural light

isn’t vital in a first home, 63% would go without a bath, 93% happy without an ensuite bathroom

First-time buyers want to clamp down on land banking and make it easier to convert buildings to

residential use, while one in ten want to build over high streets and golf courses

However, February sees 21,000 first-time buyer completions, up 11% from 19,000 in January

The housing crisis is creating growing anger and desperation among would-be first-time buyers, with over half now

willing to forgo natural light in their search for an affordable first property, according to the latest First Time Buyer

Opinion Barometer from Your Move and Reeds Rains.

When asked about the requirements that they consider to be ‘vital’ in a first home, only 49% of first-timers cited natural

light as essential. Just 54% said a garden as mandatory, and 55% a car parking space.

With the average price of a first-time buyer home now £143,767 as of February, first-timers are more willing to sacrifice

spaces including garages, dining rooms and utility rooms in order to save on costs.

Just 7% of first-time buyers said an ensuite bathroom was an essential requirement to a first-home; while 14% said a

Monthly Transactions

Average Purchase Price

Average Deposit Average Mortgage

February 2015 21,000 £143,767 £25,080 £118,687

January 2015 19,000 £149,782 £27,215 £122,567

1 month change +10.5% -4.0% -7.8% -3.2%

3 month change -16.7% -3.6% -2.3% -3.8%

1 year change -5.8% +0.8% +1.5% +0.6%

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garage was mandatory, and just a third (30%) viewed having a dining room as vital. Staggeringly, 11% of first-time

buyers said a kitchen wasn’t vital in a new home.

Adrian Gill, director of estate agents Your Move and

Reeds Rains, comments: “First-time buyers are

willing to sacrifice space and comfort in their quest

to buy a first home. But this shouldn’t be such an

arduous task – these findings should send a

warning flare out to our politicians that many first-

timers are tripping up along the path to

homeownership, despite much improved access to

finance.

“There is only a finite stock of housing on the

market, and unfortunately, first-time buyers are the

least prepared in the current scramble for property.

The lion’s share of new housing policy has been

stoking demand, rather than supplementing supply,

with the Help to Buy ISA the latest in a host of

flagship first-timer policies. But building initiatives

remain largely untouched, leaving enormous

potential to revise and improve housing policy.

“Of course, there is a flipside. Such strong buyer demand means now is a fantastic time for sellers to put property on the

market, with affordable properties likely to be snapped up quickly.”

In their bi-monthly survey, Your Move and Reeds Rains asked first-time buyers what policies they would accept to

encourage more housebuilding. Four in ten first-timers (41%) would accept legislation to prevent land banking – when

developers buy a plot of land for development but don’t build on it straight away. And over a third (37%) think it should

be easier to convert existing buildings to residential use.

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One in seven (14%) first-timers believe more pre-fabricated ‘kit’ houses should be used to build new houses rapidly,

while 11% would accept converting high streets to residential property, and a tenth (10%) would happily build over golf

courses. A twelfth (8%) of first-timers say that the greenbelt boundaries should be adjusted, 8% believe building height

restrictions in city centres should be removed, and 8% think the size of new-builds should be limited, in order to build

more smaller homes on the same available plots.

Adrian Gill, director of estate agents Your Move and Reeds Rains, explains: “The housing crisis cannot be conquered by

timid tweaking of the system – radical action is required.

“Recalibrating the way we use land will form firm foundations for more affordable housing. Potential policy changes

could include legislation against land banking and in doing so making it easier for landowners to build on their land

banks by easing planning restrictions. Building on green spaces in urban centres is another option, and – at the more

controversial end of the spectrum – adapting the green belt boundaries. Supporting smaller builders will also play a part,

to encourage more quality first-timer homes, in the locations that we need them.”

FIRST-TIMERS AND THE GENERAL ELECTION

For tenants, housing and healthcare still tie as the issues most likely to influence their vote at the General Election in

May. In February, one in six tenants (16%) said that housing was the issue that would be most likely to affect their vote,

while 16% reported healthcare as their foremost concern – with both percentages unchanged from December.

However, the political build-up has had relatively little impact on appetite for property. More than eight in ten first timers

(80%) said that the upcoming General Election has had no impact on their decision to buy in February, up slightly from

78% in December.

FIRST-TIME BUYER COMPLETIONS FALL ANNUALLY

There were 21,000 first-time buyer completions in February 2015, 10.5% more than 19,000 in January but 5.8% lower

than 22,300 twelve months ago.

Meanwhile, the average purchase price of first-time buyer properties was £143,767 in February, 0.8% higher than a year

ago. First-time buyer deposits averaged £25,080 in February, 1.5% higher than £24,721 a year before, despite

additional support for higher LTV borrowers in the form of Help to Buy.

However, the latest Mortgage Monitor from e.surv revealed a recent uptick in house purchase approvals to borrowers

with smaller deposits. Borrowers with deposits worth 15% or less of their property’s value accounted for the largest

portion of house purchase lending in five months in February.

Adrian Gill, director of estate agents Your Move and Reeds Rains, comments: “First-time buyers came back to the

market in force in February, and mortgage lending data suggests this revival will carry through into the next few months.

Wages are recovering, just as inflation has fallen to zero for the first time in decades, helped by cut-price fuel costs.

Many buyers are feeling richer as a result, and they are looking to take advantage of cheap mortgage rates now, before

prices have the chance to climb higher.”

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REGIONAL DIFFERENCES

In February, the average first-time buyer in London and the South East was 31 years old and earning £46,200. This

compares to an average first time buyer age of 30 years and income of £33,100 in the rest of the UK.

The average purchase price paid by first-time buyers in London was £300,354 in the three months to February 2015,

while Northern Ireland was the cheapest region at an average of £96,068.

SEE FULL REGIONAL MAP OVERLEAF

Region Average Purchase

Price Average deposit Average mortgage Number of FTBs*

London £300,354 £67,418 £232,936 12,000

South East £203,279 £29,655 £173,625 13,600

East of England £174,166 £42,071 £132,095 3,000

South West £156,403 £26,392 £130,011 5,400

UK £155,091 £26,198 £128,894 66,000

West Midlands £136,675 £23,787 £112,888 5,500

East Midlands £133,359 £21,657 £111,702 5,800

North West £130,858 £21,166 £109,693 6,300

Scotland £118,297 £23,407 £94,890 5,800

Yorkshire & Humber £116,207 £19,430 £96,777 5,200

Wales £112,536 £16,951 £95,584 2,600

North East £110,036 £14,518 £95,519 2,800

Northern Ireland £96,068 £12,994 £83,074 1,700

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Heat map of first-time buyer purchase prices*

* This is the total number of FTBs in the three months to February 2015. Based on CML regional data (released 25th February 2015) on the number of FTBs in Q4 2014 – grossed up to reflect growth in FTBs recorded by Your Move and Reeds Rains between Q4 2014 and the three months to February 2015.

£220,000 +

£190,000 - £220,000

£160,000 - £190,000

£130,000 - £160,000

£100,000 - £130,000

Less than £100,000

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Examples of First-Time Buyer Properties**

** Properties on the market with either Reeds Rains or Your Move estate agents at the time of going to press.

– ENDS –

Scotland

Three bedroom end-of-terrace

Auchterarder

£84,995

North West

One bedroom apartment

Hyde

£54,950

Northern Ireland

Three bedroom house

Carrickfergus

£42,500

West Midlands

One bedroom flat

Bromsgrove

£65,000

Wales

Two bedroom house

Rhyl

£70,000

South West

One bedroom apartment

Camborne

£60,000

North East

Two bedroom house

Ferryhill

£34,950

Yorkshire & Humber

Two bedroom apartment

Hull

£36,000

East Midlands

One bedroom house

Swadlincote

£65,000

East Anglia

Two bedroom house

Great Yarmouth

£60,000

London

One bedroom flat

Romford

£139,995

South East

One bedroom apartment

Waterlooville

£90,000

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Press contacts

Tora Turton, The Wriglesworth Consultancy, v.turton@wriglesworth.com, 020 7427 1445

Adam Kirby, The Wriglesworth Consultancy, a.kirby@wriglesworth.com, 020 7427 1440

Methodology

LSL uses the extensive monthly data from registered first-time buyers in its estate agency brands Your Move and Reeds Rains to update the CML’s first-time buyer data before the CML’s RMS data is published. The term ‘first-time buyer’ is here denoted by the purpose of a buyer’s registration, rather than their LTV. LSL LTV data has been applied to CML price purchase data to calculate deposit and affordability information. Sentiment and salary data are derived from a survey conducted by LSL. The figures are not mix or seasonally adjusted, and are subject to revision as more data becomes available.

This First Time Buyer Opinion Barometer has been prepared by The Wriglesworth Consultancy for LSL Property Services. It has been compiled using information extracted from LSL’s management information. The copyright and all other intellectual property rights in the First Time Buyer Opinion Barometer belong to LSL. Reproduction in whole or part is not permitted unless an acknowledgement to LSL as the source is included. No modification is permitted without LSL’s prior written consent.

Whilst care is taken in the compilation of the First Time Buyer Opinion Barometer, no representation or assurances are made as to its accuracy or completeness. LSL reserves the right to vary the methodology and to edit or discontinue the First Time Buyer Opinion Barometer in whole or in part at any time.