THE number of people looking to buy a new property in the next two years has risen for the first time since spring 2001.

Despite warnings that house prices could cool during 2003, 12 per cent of Britons are planning on buying a new home during the next two years.

This figure is up from the 11 per cent recorded in each of the last three quarters, according to Alliance & Leicester.

The most common reason is to save money, with one in five people saying they are thinking of buying because it is cheaper than renting.

The lowest interest rates for more than forty years and fierce competition among mortgage lenders are likely to an influence.

Younger buyers seem to be driving the property market: more than one in four in their twenties intends to buy within the next two years. In this group, 28 per cent cite buying being cheaper than renting as their reason but an even bigger motivator is the need for independence.

Paul Cooper, head of mortgages at Alliance & Leicester, said: “Although there is some uncertainty in the housing market, low interest rates and fierce competition amongst mortgage lenders continue to make buying very attractive.

Cooper added: “The fact that so many people in their twenties are planning to buy is an encouraging sign, and bodes well for the health of the property market.

A&L’s quarterly movingimproving index asked a sample of 4,000 people whether they intended to buy a new home, and, if so, why.

n The number of people intending to buy a new home in the next two years has risen to 12 per cent, up from 11 per cent in each of the previous three quarters. However, the proportion of people intending to move is still down on the high of 15 per cent seen in summer 2001.

n Intentions to move within the next 12 months are stable at five per cent, unchanged since autumn 2001, but those looking to buy within the next one to two years has risen to seven per cent from six per cent in the last three quarters.

n Men are more likely to be looking to move, with 14 per cent saying they are thinking of buying a home within the next two years compared to 11 per cent of women.