First-time buyer numbers set to fall

Only 25.8% of those planning to purchase a property in 2010 is a first-time buyer.

According to the quarterly confidence survey carried out by property portal Rightmove, the proportion prospective of first-time buyers has now fallen for two consecutive quarters.

Rightmove has expressed concern about the impact of this reduction on the overall property market, pointing out that, in a healthy market, first-timers would account for around 40% of all buyers.

First-time buyers are often referred to as the ‘lifeblood’ of the housing market as without them second-time buyers have no-one to sell to and the whole system grinds to a halt.

Miles Shipside, commercial director of Rightmove, says:

"First-time buyers play a crucial role in keeping the market moving by helping to complete chains, and their continued absence delays any prospect of a meaningful market recovery."

Oddly enough, London – by far the most expensive part of the country in which to buy - is the only region in which the proportion of potential buyers who are first-time buyers is close to normal at 43%, although this is down from 48% in the third quarter of last year.

In Scotland just 19.3% of potential buyers are first-time purchasers. The picture also looks bleak in the East Midlands, where 21% are first-timers.

Rightmove warns that the number of first-time buyers entering the housing market is likely to fall even further, as the proportion of people who think now is a good time to get on the property ladder falling for the fourth consecutive quarter to 58%.

The fall in confidence may be a result of the recent falls in average property prices.

Figures from the Council of Mortgage Lenders show that only 198,200 people bought their first home last year, up from 193,700 in 2008 but still the second lowest figure since 1974.