The number of first-time buyers surged last month as a lull in landlord purchases kicked in, according to Connells Survey and Valuation.
In the first month of 2017, it noted that first-time buyer valuations rose by a fifth year-on-year (21%), driven by high employment and an uplift in weekly earnings.
This has increased the importance of first-time buyers to the overall housing market, as they are now responsible for a third of activity (34%), up from a quarter at the start of 2016 (25%).
John Bagshaw, corporate services director, said: “With UK employment close to its 11-year high and weekly earnings rising by 3%, many first-time buyers are fitter financially than they were a year ago. Aided by cheap mortgages rates, aspiring home owners have seized the opportunity to get their first foot on the ladder.”
At the same time landlord investment has declined by 63% year-on-year, said Connells.
This is partly because of the surge in buy-to-let purchases in January 2016 as landlords brought forward purchases to avoid the stamp duty surcharge – but landlord investment is still well down on January 2015.
John Bagshaw said: “The new White Paper’s aim of helping tenants through supporting the build to rent sector could be rendered ineffective with this recent drop in investment from private landlords. While a potential increase in build to rent homes will take some years to filter through, the slowdown in buy-to-let purchases will soon start to bite, with fewer rental properties coming onto the lettings market.
“This shortage of supply could fuel competition from tenants with the potential to push up rents.”