"First-time buyers who have been able to successfully navigate 2023’s higher interest rates have increasingly found themselves at the front of the home-hunting queue."
- Aneisha Beveridge, head of research at Hamptons
70% of adults planning their first home purchase within the next three years expressed a willingness to compromise in order to own their own home, placing factors like garden size, location, and bedroom count at the forefront of these decisions, according to a new poll by Skipton.
Of those willing to compromise, 42% are content with a smaller garden, while 37% are open to residing further away from their initial preferences, with many happy to downsize from their original dream as 67% anticipate their first home will be on the smaller side.
Although first time buyers are willing to compromise on the features of their first home, almost half (47%) are considering overbidding to ensure they have a better chance of securing the home that is right for them.
Internal data from the Skipton Group, encompassing Skipton Building Society and Hamptons Estate Agents, reveals that first-time buyers made up over a quarter (28%) of the housing market in 2023. This marks a steady increase from 16% in 2015, showcasing resilience amid challenging economic climates, including the recent pandemic and market fluctuations.
The survey of aspiring first-time buyers, indicates that 34% expect to own a semi-detached property, followed by flats (25%) and terraced houses (21%). Notably, in London, flat ownership is more anticipated (38%) than in other regions (26%).
In terms of further geographical trends, figures from Skipton Building Society and Hamptons revealed more first-time buyers are from London and the south of the country this year compared to last, but there have been fewer in the north of England and around Yorkshire in the last 12 months.
There are 28 local authorities where those buying their first property actually outnumbered other movers – with the majority being in the south. Areas in and around London like Brent, Greenwich, North Northamptonshire, Dartford and Bexley saw swathes of new buyers, compared to more experienced movers.
In terms of receiving support towards their home owning goals, those in London were far more likely to receive money towards their deposit from their parents or guardians than other regions – 46% compared to the national average of 35%. However there seems to be an increased buying power of these younger house hunters – the average household income has increased by 14%.
Charlotte Harrison, CEO of home financing at Skipton Building Society, commented: "We’ve seen many first-time buyers become more realistic than optimistic with what they can afford and adjust their property expectations. Aspiring homeowners in 2024 are encouraged to explore a range of options available to them, as the first step onto the property ladder may be closer than they think."
Aneisha Beveridge, head of research at Hamptons, added: “First-time buyers who have been able to successfully navigate 2023’s higher interest rates have increasingly found themselves at the front of the home-hunting queue. With nothing to sell in what’s been a tough market, those buying their first home are being favoured over offers from anyone with somewhere to sell, often even when their offer is a little lower.
“This means they’re getting more home for their money than they were last year, particularly if they’ve got a healthy deposit. New buyers have been driven into the market by rapidly rising rents which are making the increases in mortgage rates look more palatable. However, with mortgage rates forecast to continue falling, movers will probably return in more meaningful numbers in 2024.”
