This is shaping up to be a strong year for first-time buyers,
as Zoopla’s latest House Price Index shows that this demographic was the
largest buyer group in 2022 and is set to be a strong source of new sales again
for the remainder of this year.
Are you a first-time buyer? Begin your journey with us today.
First-time buyer resilience
According to Zoopla,
the housing market is seeing resilience from first-time buyers in the face of
tougher mortgage affordability testing. The property search portal
estimates that first-time buyers using a mortgage accounted for over 1 in 3
sales last year (34%). Making those taking their first steps onto the ladder
the largest group of home buyers, followed by existing homeowners using a mortgage (31%) and cash buyers (25%).
Steep rents push tenants towards buying
While higher mortgage rates could be a deterrent for first-time
buyers, the majority (75%) of them have emerged from the private rented sector, where rental costs are continuing to climb by around
£1,120 in the past year alone.
There are also fewer homes available to rent, with around a third
fewer homes available than the long-run average, according to Zoopla. These
factors are leaving renters with the difficult decision to keep paying rent, or
to invest in a
home. Many appear to be opting for the latter as the rental market shows little
sign of improvement in terms of affordability.
Strength in buyer demand across the boards
Buyer demand for homes
remains 14% higher than in 2019, an untypically high rate due to a shortfall of
availability for property on the market.
But with choice improving as supply sees growth, prospective
buyers are granted the opportunity to choose from a greater variety and find a
home that’s right for them. As a result, this is having a positive effect on
new ‘sales agreed’, which are up by 6% compared to 2019, and 10% ahead of the
five-year average after Easter.
Regionally, the North East is seeing the highest levels of new
‘sales agreed’, thanks to enticing affordability levels. In London and
Scotland, it’s a similar story, with a sustained period of notable but steady
price inflation over the last six years also helping to improve chances of
getting on the property ladder in 2023.
Richard Donnell, Executive Director at Zoopla, comments:
“Housing market conditions continue to improve as buyers return to
the market and more sales are agreed. House prices are posting very modest
falls and are expected to be just 1% lower by the end of the year. The worst of
the pricing adjustment appears to be behind us.
“We expect first-time buyers to have another strong year in
2023 having been the largest buyer group last year. They need more income to buy but
are starting to look for smaller homes and get away from rapid growth in rents.”
Are you
ready to get on the property ladder? Contact us today for help with finding your first home
