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King Sturge

FIRST TIME BUYERS FACING BIG SQUEEZE IN 2010

House prices in the South West will buck the trend and show a slight increase, says King Sturge
 
A shortage of new homes for sale will squeeze first time buyers in the South West this year, according to property consultants King Sturge.
 
Vicky Dudbridge, senior associate in King Sturge‘s Bristol-based residential team, told the firm‘s annual media briefing that 2010 would see the region recording a small increase in house prices.
 
However, she said that with no affordable housing units currently being completed, the lack of affordable housing for first time buyers is due to get worse.
 
“Overall, I am pleased to say that the new homes market has not been as bad as predictions at the beginning of last year would have led us to believe,” she said.
 
“We feel that the South West, and Bristol and Bath in particular, will buck the national trend with a slight price increase this year. But the situation remains difficult for first time buyers, with affordability once more on the back-burner.”
 
Vicky Dudbridge said first time buyers had been helped by developers and the Government with schemes such as Homebuy Direct, which effectively lent up to a 30 per cent deposit on their first property. But as the market improved, developers have stopped offering equity share incentives, leaving buyers having to find up to 30 per cent deposits in order to get onto the property ladder.
 
“A high level of cash buyers helped to give an unexpected boost to sales, with buyers looking to invest in property because previous investment favourites, such as the stock market and foreign investments, were seen as unstable and risky. Nonetheless, the latter part of last year saw a 43 per cent rise in mortgage transactions.”
 
In the wider market, only seven new housing developments were under construction in central Bristol during the year and only four could offer buyers a property they could move into straightaway. This compares to 14 schemes at the market peak in 2007.
 
“This year, a further four sites are under construction in the city,” she added.
 
“In addition, developers are working on preparing other sites for the market and finalising detailed planning consents in readiness for launch once current sites are sold out.
 
“Encouraging though this is, the late start in construction means that none of these developments will be able to offer completions until 2011, leaving a stock gap in the market this year.
 
“As a result, there will be a shortage of available new housing by the middle of the year, and a fall in completion levels compared to 2009.”
 
ENDS               27th January 2010
 
For further information please contact Neil Fraser, Sturgess Van Damme, on 01275 349011 or email neil@sturgessvandamme.co.uk
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