First-time buyer sales remain positive


First-time buyer sales remain positive

First-time buyer sales remain positive
As uncertainty is set to continue across the country until at least the end of the year, the property sector is just one of many in the country which has felt the impact.

However, to dispel some of the doom and gloom around what’s happening politically, figures have come through recently to show first-time buyer sales have been the best they’ve ever been for over a decade.

What’s the reason?

Ultimately, Brexit has led to the increase in sales, with first-time buyers taking advantage of the otherwise quiet market. Figures from the estate agent trade body NAEA Propertymark show the proportion of homes sold to first-time buyers increased to 30% of all house sales, for the month of September. By comparison, the figures for the same month last year were 22%. When it comes those taking their first step on the property ladder, this is the highest proportion of sales since February. 

Sky-high sales

In fact, the figures emanating from first-time buyer sales have soared to the highest they’ve been in twelve years. Such numbers haven’t been seen since before the financial crisis! According to figures from UK Finance, the month of August this year saw a total of 35,010 mortgages advanced to those buying their first home. This figure is the highest monthly total since August 2007 and before the recession. Looking at 2018 as a whole, over a third (36%) of the property purchases made were done so by first-time buyers, a whopping 85% increase since 2010.

Why are the numbers so good?

As we already mentioned, Brexit and its uncertainty has led to many property owners deciding to sit tight and wait before selling and buying their next home. First-time buyers therefore have been and are able to shop around in a less competitive market. The government brought in tax increases on landlords this year which has led to a decline in the number of landlords looking to increase their rental portfolios, as much as landlords quitting the sector all together. Typically, the two groups, landlords and first-time buyers would be attracted to the same kind of properties. So, there’s been greater choice for first-time buyers over the last twelve months.

There have also been plenty of incentives for first-time buyers to take advantage of. The first-time buyer figures have certainly received a boost thanks to government help, with schemes like the Help to Buy equity loan initiative and the Help to Buy ISA. Stamp duty exemption for first-time buyers on properties purchased for £300,000 or less have helped too.

Good news for the market

When it comes to looking at the property market overall, first-time buyers are vital to its success. We need buyers to buy properties at the bottom of the ladder, to enable existing homeowners to trade up it. So, the news of the strong return of first-time buyers is great news. Right?

It most certainly is, but an interesting statistic came through from the Land Registry over the Summer. It showed growing evidence of first-time buyers dismissing smaller, starter homes and flats as their first homes. Instead, they are leapfrogging this property to move to a larger, family home.
Because many first-time buyers have to save so much in the first instance, it’s case of let’s carry on saving and buy bigger now. Plus, they can take advantage of the competitive mortgage offers currently available and the stamp duty savings. The only problem with this trend is that it will make things more difficult at the next stage. Second-time buyers may struggle to sell their existing property and face greater competition when buying their next home, with prices squeezed higher due to demand.

Whether you’re a first-time buyer looking for a new property across the Altrincham, Sale, Hale or wider Cheshire areas, or you are considering selling your home in any of these areas, speak with  one of our professional agents today. We know the local market very well and can give you advice you need, whatever your property circumstances.