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No real housing recovery without first-time buyers

Applicant numbers were up by 6% over the month and by almost 32% in the last three months. The increased in demand, together with a move to more realistic pricing, has supported a growth in the number of sales.

Agents reported that sales volumes grew by 15% in April and were up by 70% over the last three months, albeit off a very low base.

While the pick up in demand and sales is real, the volume of transactions is set to be less than half the level that would constitute "normal" market conditions.

Buyers of family housing at Low Loan to Values (LTV) together with cash investors have been behind the improved sales figures of recent months, but the market cannot operate indefinitely with just one sub-set of active buyers.

First-time buyers must be factored into the equation and the fact remains that the majority of these remain affordability constrained and unable to access mortgage finance.

A broad based sustainable recovery in the housing market needs to be supported by a broad base of buyers.

While the volume of demand is up by 32% in the last three months, the number of properties on agent’s books have risen by just 9.4% over the same period. This is leading to agents reporting supply shortages in parts of the country. Across the country, house prices were down across 30% of postcodes compared to 50% in March and almost 75% in October 2008.

The average time taken to sell has fallen for a third consecutive month and stands at an average of 10.4 weeks compared to a recent high of 12.3 weeks in January. The proportion of asking price being achieved continues to rise and is now at 89.6% compared to a recent low of 88.3%.

On a regional basis the lowest price falls were recorded in the South East and East Anglia where values were down by just -0.1%. The larger price falls were seen in the North East and Wales where prices were down by -0.7% and -0.8% respectively.

This month’s survey was based upon 6022 responses from 1795 agents and surveyors across all 2300 postcodes in England and Wales.

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