The number of house hunters registered at estate agents slumped 16 per cent last month, according to a new report by NAEA Propertymark.
The number fell from 367 registered per branch in January to 309 in February, with a 28 per cent year-on-year drop. Agents had 425 house hunters registered per branch in the same month last year.
In line with demand, the number of properties available for sale per branch dipped from 36 in January to 35 in February. The rate of properties which sold at asking price was at the highest level since June 2016
Sales to first-time buyers rose last month though, reaching their highest point since February 2015.
The February housing report said the chancellor's first-time buyer stamp duty relief seemed to be having an impact, with sales to the group rising to 29 per cent last month – up from 27 per cent in January.
Last year, first-time buyer sales stood at 22 per cent, and in 2016 they were at 24 per cent. The average number of sales agreed per branch increased from seven in January to eight in February, which was the highest reported since last October.
Mark Hayward, chief executive, NAEA Propertymark said: "Since the chancellor cut stamp duty for first-time buyers, there have been a good level of sales to the group, but they haven’t rocketed."
He said Propertymark members had noticed first-time buyers holding off on making purchases since the rule was introduced – typically outside of London – instead deciding to save for longer to maximise "the full stamp duty relief".
Hayward added:
This may be one reason why sales are up but not as high as we might expect; the other reason is that the cost of buying is still very high, and first-time buyers are still finding it difficult to save for their deposit.
As the cost of living continues to rise – with consumer price inflation standing at 2.5 per cent in February – we still have a long way to go to make the dream of owning a home accessible to all, but this is definitely a step in the right direction.