House prices stymied by first-time buyer shortage February 2011

 

 

The low number of first-time buyers is casting a shadow over the housing market, according to the Nationwide's chief economist.

Robert Gardner, Nationwide's chief economist, said that although house price figures increased by 0.3% month-on-month in February, and were just 0.1% lower than a year ago, first-time buyer numbers have not begun recovering to pre-financial crisis levels, and are not likely to improve until labour market conditions strengthen.

He said first-time buyers play a crucial role in housing market dynamics: “With the supply of housing fixed in the short term, the flow of new buyers into the market has a major impact on prices and activity. The fact that first-time buyer numbers are well below the levels prevailing before the financial crisis casts a shadow over the outlook for the wider market.”

 

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