First-time buyers return

First-time buyers are reappearing as the housing market continues to boom, according to a new survey.

Their numbers rose for the second month in a row to more than 17 per cent of homebuyers, the National Association of Estate Agents found.

While the level was down on the 2002 average of 25 per cent, it was another increase from the all-time low of 14 per cent in May this year.

Last week, the Halifax reported that price rises averaging £20,000 a year had squeezed the number of firsttime buyers to a record low. There were just 174,000 in the first half of 2003 compared with 253,000 in the same period last year, according to Britain's biggest mortgage lender.

But the association's report shows the number of homes for sale and inquiries have returned to levels seen last year.

'With interest rates left unchanged this month at a historic low, the rest of the year should see a steady improvement in both house prices and number of transactions,' said president Melfyn Williams. He added there was clear evidence of a return of confidence among firsttime buyers.

House prices rose by 8.5 per cent in the past year, according to the association's July figures.

This was close to the previous month's figure of 8.6 per cent, suggesting the sharp drop in house inflation seen earlier in the year was over.

The number of viewings before a sale - averaging 15.7, against 27.4 the previous month - also showed the health of the market.