News: Spring in the step of London first-time buyers?

The latest data from haart estate agents reveals that London house prices continue to rise as property prices increased by 1.5% in March.

The average price of a property in London is now £243,963 from £241,000 in February.

The level of first time buyers has increased by 3% in March to 28% of the market share. Haart believe this indicates first time buyers are more confident in the state of the housing market after a period of readjustment last year.

First time buyers returning to the market but remain price sensitive

Paul Smith, chief executive of haart estate agents commented: "Last year first-time buyers represented under 20% of the market share. Many potential first time buyers were sitting on their hands waiting to see what would happen to the market."

"Recently we have seen a resurgence of this all important group to 28% of the market share, as confidence has returned. However in early 2004, they represented 35% of the market, we are obviously not there yet but we are confident of reaching this level again soon."

"With house prices slightly increasing for six consecutive months, first time buyers remain very price sensitive and as they fuel the market, prices will have to be realistic. After a period of realignment last year they returned to the market but if prices continue to increase, first time buyers will simply fall away again."

Looking ahead

With the continued interest in the market and shortage of housing stock in the Capital, haart believes that London house prices will increase by as much as 7% in the first half of the year, so far the average house price has increased by 4.5% since the beginning of the year. This is likely to cool off in the summer and autumn months to an annual increase of 5%.

Regional variations

North East, East and South East London saw the greatest price increases in March with average property prices increasing by 4.4%, 2.45% and 2.16% respectively.

These areas have benefited from an increase in applicant levels particularly with first time buyers and the continued regeneration and improvement in the 2012 Olympic areas.

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