Why buy? Are future expectations driving the property market?

Why buy? Are future expectations driving the property market?

The reasons for buying a property are plentiful, be it to see some stability in life, to have a tangible asset rather than just paying for a place to live or even just because it marks a traditional milestone for many.

However, the ever-improving property market is actually bringing about a new sentiment in buyers, with many looking to buy now because they see the current state of health as a starting point for bigger things and a more valuable asset in years to come.

According to the latest release from LSL Property Services, there are more first-time buyers than ever before who are purchasing because they think prices will rise significantly in the future.

The report stated that in the past year, there has been an increase of 42 per cent in the number of first timers coming to market in the UK, with many taking advantage of government schemes and better lending conditions.

And with price increases in London having topped 13 per cent for someone who bought their house just a year ago, it's easy to see where the confidence lies at the moment. 

Confidence among new owners is very high at the moment, with LSL Property Services stating that 81 per cent of buyers are expecting to see their home appreciate in value over the next year, and nine per cent saying that they predict it will be worth ten per cent more in 12 months' time than it is now. 

"The reason first time buyers are taking advantage of Help to Buy in such numbers is that they expect prices to keep rising. That’s pushing up demand in the short term, which is supporting prices in the long term," said David Brown, commercial director of LSL Property Services.

The change in sentiment in the British property market has been quite remarkable in the past few years. As recently as 2010, buyer numbers were almost bottoming out, with many people expecting to never be able to afford to buy.

In fact, there were even times when it was being reported that the UK would be likely to move towards a European model in which people rent for life rather than ever buying, but this appears to have been a prediction that came too soon.

LSL's report shows that only ten per cent of people think they will never buy, dropping from more than 20 per cent just over a year ago.

It is a striking return to health for the market, and it shows just what a year can do. Following the re-emergence of affordable borrowing and the healthier economy, many Brits are seeing a bright future for property, and are willing to invest for the long-term. There can be no better vote of confidence than that.