Growing numbers of Welsh first-time buyer properties are changing hands at their asking price or above as the housing market recovery gathers pace, industry experts have said.
Estate agents say monthly sales have increased to levels not seen for four years, building on wider positive trends emerging from the property market.
Average sales increased from nine per branch in April to 10 in May, following a continued rise from the beginning of the year when the figure stood at just seven, according to the National Association of Estate Agents (NAEA).
Wales spokesman for the Royal Institution of Chartered Surveyors (Rics) Tony Filice said the first-time buyer end of the property market is now ultra competitive with homes “very often” meeting or outstripping their asking price.
Bangor University economist Dr Rhys ap Gwilym said the price growth is symptomatic of an improving economy – the International Monetary Fund (IMF) has increased its UK GDP growth forecast from 0.7% to 0.9% for this year.
The NAEA also revealed a more than 14% rise in the number of house hunters compared with last year’s figures – up from an average of 274 per branch in May 2012 to 313 in May 2013.
Mr Filice, who is also a director at Cardiff estate agents Kelvin Francis, said: “There are various pockets of increased demand. Dramatically, in particular, for first-time buyer price ranges.
“They’re effectively coming in at full prices, or in some cases over the price, to achieve the property.”
Property website Rightmove has said asking prices rose by 0.3% month-on-month in July to reach a new peak of £253,658 on average, completing a hat-trick after records were also set in May and June.
In Wales new sellers are asking around 2.4% more for their homes than a year ago.
Dr ap Gwilym said the improving economic picture has been helped by a recent indication from the Bank of England’s new governor Mark Carney that interest rates are not likely to move from their all time low of 0.5% for at least the next year.
“That obviously makes it easier for banks when they are setting a two-year fixed rate,” he said.
The Government has sought to lift the housing market out of its trough with its Funding for Lending and Help to Buy schemes.
In Wales the Help to Buy scheme, which doesn’t begin until January, will offer to underwrite mortgages for those with a 5% deposit in order to increase the availability of 95% deals.
Also Funding for Lending is making low-cost credit available to banks. Further the Government has used up to £375bn worth of quantitative easing – electronic money printing – to bolster the banks’ balance sheets and boost borrowing.
Despite optimism the average number of first-time buyers has dropped from 23% in April to 20% in May, which suggests more still needs to be done to help this section of the market, say the NAEA.
The supply of properties also saw a slight decrease from 61 for sale per branch in April to 60 in May, possibly due to the record sales figures in recent months.
North Wales estate agent Dafydd Hardy said the first-time buyer market there is not as heated as on Mr Filice’s patch in the Welsh capital.
Mr Hardy, whose firm has five branches across north west Wales, said: “Generally we’re not seeing big price rises if any, but the houses are selling because vendors are more realistic on their pricing.”
Spokesman for the Council of Mortgage Lenders (CML) Bernard Clarke stressed that overall the number of house sales is this year expected to increase fairly modestly by around 2% from 930,000 to 950,000.
This equates to a house changing hands once every 20 years. In 2007 before the recession set in the number of sales hit 1,430,000.
Mr Clarke said: “We are recovering from relatively low levels of activity and that process is likely to be extended over quite a long period.”
Mark Hayward, managing director of the NAEA, said: “These really are encouraging figures; serious house hunters are continuing to enter the market and are intent on buying.”