Wednesday, 4 July 2012 2:24 PM
The proportion of home sales going to first-time buyers fell to the lowest level for six months in May, according to the National Association of Estate Agents (NAEA).
Its latest monthly report shows that just 17 per cent of overall sales went to first-timers in May, compared with 24 per cent in April.
That is the lowest share of sales since the 16 per cent recorded in October 2011. Before that, the share had not been as low for three years, when it hit just 10 per cent in the depths of the financial crisis in December 2008.
The figures follow turmoil in the economy and Eurozone and the end of the stamp duty holiday for first-time buyers in March, which encouraged many of them to bring forward purchases.
The number of house hunters registering at branches across the country also fell, with 274 per branch in April compared to 294 in May.
Estate agents sold an average of seven properties per branch in May, which was unchanged on March and April. However, the supply of homes available rose from 62 per branch in April to 66 in May.
NAEA president Mark Hayward said: "Sadly, as the NAEA predicted, the government's removal of the crucial stamp duty holiday for properties priced at £250,000 and under has hit the fragile first-time buyer market hard.
"At what is a very turbulent time for the economy, both here and in the Eurozone, the major banks have introduced tighter mortgage restrictions and placed increased pressure on household finances, the government should be doing all it can to stimulate housing market activity.
"It remains to be seen what effect the £140bn emergency funding plan, announced jointly by the Treasury and Bank of England last month will have in encouraging banks to pass on cheaper mortgages to househunters."