First-time buyer activity surged in January as 21% more first-time buyers took out a valuation on a property.
As it stands first-time buyers account for a third (34%) of activity, up from a quarter (25%) at the start of last year.
John Bagshaw, corporate services director of Connells Survey & Valuation, 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 homeowners have seized the opportunity to get their first foot on the ladder.
“The demand for homes has been particularly high in January, with the Connells Group estate agency network for instance seeing nearly 12 applicants per each new instruction that comes onto the market.”
Bagshaw added: “As a proportion of the overall valuations, first-time buyers are now even more important to the health of the market – making up a third of activity.
“It will be reassuring for the government to know that their policies to boost demand from first-time buyers are bearing fruit.”
The number of valuations carried out on behalf of people selling property rose 10% in January 2017, compared to the same month last year.
But while valuations for first-time buyers and those selling homes increased landlord investment has declined by 63% year-on-year.
At the start of 2016 landlords rushed to buy before the 3% stamp duty came into force, while the market has been cooled by measures including the PRA’s stress tests and the upcoming reduction to mortgage tax relief.
Bagshaw said: “There is a serious risk that the government’s attempt to increase the number of affordable homes to rent will also be overshadowed by the impact of George Osborne’s taxation policies aimed at private landlords.
“As the government’s definition of ‘affordable’ is linked to the market averages, rather than tenant incomes, rising rents could mean new ‘affordable homes’ are out of reach for those just about managing.”