Press Release: Rising house prices hit first time buyer demand in the London property market
Mon 01 Mar 2010
But, the end of the stamp duty holiday passes largely unnoticed in the capital
The number of first time buyers actively looking to purchase a property in London has dropped off significantly in 2010, as a lack of affordability has hit demand, according to estate agent Marsh & Parsons.
In January 2009, first time buyers comprised 17% of new buyer registrations at Marsh & Parsons, but while there are plenty of buyers registering (over 2,600 so far in 2010), this number fell to 10% in January 2010 - and below one in ten in February. However, with so few London properties in the lower price threshold, the end of the stamp duty holiday at the turn of the year has not played a significant part in this drop-off.Between January 2008 and April 2009, house prices fell by up to 30% in some parts of London, and last year this improved affordability led to a large increase in demand from first time buyers, looking to get onto the property ladder. In August 2009, first time buyers made up almost one in five new registrations (19%), reaching a peak. However, strong house price growth in the capital since spring 2009 (up 39,602 or 13% on average) is now deterring growing numbers of first timers.*
Peter Rollings, managing director of Marsh & Parsons, commented: "Central London may not be typical first time buyer territory, but its little wonder why. Mortgage lenders now typically require a 25% deposit from first time buyers, meaning they would need to put down over 84,000 to purchase the average London property realistic for only the tiny minority with substantial parental assistance.
"The end of the stamp duty holiday has not had a great impact on demand, as so few purchases were eligible for exemption. The lack of homes priced below 175,000 meant only 13% of London transactions benefited from stamp duty relief in the first year of the holiday and only 22% of these purchases were in Inner London boroughs.** Higher average house prices mean London is the area where first time buyers are most in need of support and, if the government is serious about helping them, it must reintroduce the stamp holiday and crucially take into account the wide regional variations in prices."
First time buyer hotspots remain popular, but are not immune to price rises
Areas in south west London, such as Clapham and Balham, which are traditionally popular with first time buyers continue to be a strong draw, but have also seen slightly reduced first time buyer demand in 2010. In Marsh & Parsons Clapham office, first time buyers comprised over a third of new buyer registrations throughout 2009 (34%), dipping slightly to 28% in February 2010. In Battersea, 30% of new registrations were first time buyers in 2009, which fell to 25% in February.
Peter Rollings said: "Central London is in effect inaccessible for most first time buyers, but areas like Clapham although not immune to the impact of rising prices - remain ever-popular destinations for young professionals looking to buy their first home."
For further information please contact:
The Wriglesworth Consultancy Tom Urpeth / James Staunton 0207 427 1400
Marsh & Parsons has been part of the London property scene since 1856. The sales and lettings agent has 14 offices situated in prime positions across central, west and south London. They have an intimate and extensive knowledge of the area.
Marsh & Parsons are an independent and professional firm with a 'can-do' attitude covering all aspects of residential property. They aim to establish individual relationships with clients through a business built on energy, agility, professionalism and knowledge. Their business aim is to be the agent who not only understands the local area around their offices better than any other agent, but also to be at the heart of the community.