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Demand keeps prices rising after last year's slump

Property signs
Property signs

Demand from first-time buyers is rising, while buy-to-let investors are now gravitating towards houses rather than flats, according to research from the Royal Institute of Chartered Surveyors (RICS).

The institute's new buyer inquiries series has reported a positive net balance for 11 consecutive months. On the back of the improvements, RICS decided to delve a little further into this trend.

Questions were asked about the proportion of inquiries coming from first-time buyers and whether surveyors are now seeing a rise in buy-to-let investment.

Surveyors reported that 13 per cent of new inquiries derived from first-time buyers with 28 per cent reporting that the number of first-time buyer inquiries had increased over the past three months. The rise was most rapid in the South East.

"House price falls and lower interest rates have gone some way to tempting first-time buyers back into the market," said Simon Rubinsohn, RICS chief economist.

"However, buyers still need to have greater deposits to access the market with lenders remaining generally cautious. This is making it hard to translate this interest into hard transactions.

"The firmer tone to the market has also rekindled inquiries from buy-to-let investors."

lLatest figures from Halifax show that the average cost of a home rose for the fourth month in a row in October to stand £11,000 higher than when house prices hit their low point in April. The average home now costs £165,528, 2.9 per cent more than it did at the end of last year.

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