First-time buyers returned to the property market in January at a faster pace than any other type of customer, with a 56% rise in buyers over the month.
But they face stiff competition from buy-to-let landlords, with valuations rising a solid 29% in January, according to new research by Connells Survey & Valuation, published today.
Demand for rental property remains solid despite the rise in first-time buyers, Connells said, leaving the buy-to-let sector on course for solid growth.
The rise in the number of first-time buyers was "significantly faster" than any other sector of the housing market. Valuations are now 35% higher than 12 months ago.
John Bagshaw, corporate services director of Connells Survey & Valuation, said: “A certain New Year jump is normal, but this January has felt more like a stampede.
"The seasonal rebound between December and January has been significantly stronger than we usually experience.
“One factor is the effect of government schemes, with the vast majority of Help to Buy loans taken out by first-time buyers.
"Alongside this is a wider movement, fuelled by a general surge of confidence and a new willingness by lenders to target new buyers.”
There was a strong increase in activity across all sectors in January, with total valuation is up 37% on a monthly basis, and up 33% over the year.
Bagshaw added: “The winter lull is already over. Current weather conditions might still be causing havoc, but the housing market is feeling the full warmth of spring.
"Monthly conditions are still variable, but the economic climate is going the right way. Certainly, the ice age of the last seven years has well and truly thawed – and this is finally reflected in a flourishing housing market.”
Buy-to-let activity rose 32% in the 12 months to January, Bagshaw said. “First-time buyers have come back to the market in dramatic numbers, but demand for rental property is still solid.
"So combined with steady capital accumulation from price rises the buy-to-let market looks set for consistent growth for some time.”
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