Is this summer the time for buyers to get on the ladder at last?

Is this summer the time for buyers to get on the ladder at last? [Photo: Courtney Keating via iStock]

Over the past few months and years, the number of people who own their own home has been falling considerably as the volume of people who live in the private rented sector grows time and again. With more than 4.6 million tenants across the UK, representing more than a third of households in the nation, the ability of people to get onto the housing ladder has clearly been affected by market conditions over the past few years. 

However, earlier this year, the government decided to step in and take action that it said would make it easier for people to get themselves a footing on the housing ladder. As well as announcing the building of some 400,000 homes over the course of the next few years, the government said it will be looking to increase the number of new buyers through schemes such as the Stamp Duty levy, which is designed to discourage rental market investment, leaving homes available for those who would be looking to buy for the first time. 

With this in mind, is the summer of 2016 the right time for people to be getting themselves onto the property ladder at last, and will it be easier for them to get themselves a home?

Demand levels

One of the most positive factors that plays into the ability of buyers to get themselves onto the property ladder is demand. When demand is high, it stands to reason that there will be more competition between buyers, which means prices are inflated, pushing some of the potential first buyers out of the market. 

However, when demand falls, we see the market become more favourable to buyers. There will be less competition, and more desperate sellers will have to accept lower prices in order to make sure they get the sale for their property so they can move up the ladder. 

Heading into summer, there is a real promise that this might start to happen. In the March quarter of this year, there was a real rush on properties, which meant there were prices rising time and again as landlords rushed to complete in order to beat the increase in Stamp Duty that came into play at the start of April. According to the latest figures from Hometrack, the number of buyers has fallen drastically in the month since the new tax law came into effect, with the volume of registered buyers dropping by 22 per cent in just one month. 

It may not seem like a significant drop, but it is one that paints a good picture for buyers. Heading into summer, if this trend continues, it could well mean buyers being able to get their foot on the property ladder at long last, and without having to shell out the high prices that often come in the summer months. 

Landlords out

One effect that the government's plans have had that makes for good reading for new buyers is that many landlords are looking to either slow their investment intentions or completely leave the market. But what does this mean for those who are looking to get themselves their first foot on the property ladder? 

When landlords are exiting the marketplace, as many have threatened to do, it will mean a swelling of stock. In March, stock levels on the market fell dramatically, dropping down 35 per cent as landlords bought ahead of the new tax changes coming in. However, when more landlords decide to leave the market, as many have threatened, it will mean this stock is replenished, and potentially even more homes than before becoming available to buyers. 

Homes that are locked in the rental sector are often prime stock for first-time buyers, so any time these start to come back into circulation is good for buyers. These properties tend to be lower in price, and their availability means that there is a far improved possibility for younger people to get themselves onto the property ladder in the short term, meaning that this summer could well bring about the new age of the buyer in British housing.