According to a report by Reallymoving, the first-time buyer market has bounced back to pre-pandemic levels, despite the rise in house prices.
Reallymoving’s report collected data from 27,000 conveyancing quotes completed by buyers and sellers in Q2 of 2021.
Despite the chances of being priced out of the market, the data shows that first-time buyers are sitting at 55% of the market share, an increase of 4% when compared with 51% in 2020. The competitive nature of mortgage rates has played a key role in the return of the first-time buyer market, with mortgage payments costing 31.1% of take-home pay despite the hike in purchase prices.
The report also indicated that the double-digit house price inflation, reported by other research indices, is mainly due to those upsizing or investing. Whereas for first-time buyers, Reallymoving’s report shows that inflation is actually lower (2.5% annually, versus 10% for those upsizing). This can be explained by the majority of first-time buyers, who generally purchase cheaper homes and rely on a mortgage.
When it comes to house prices, the report highlights significant regional differences. Although the average house price is often reported across the UK as £250,000, Reallymoving suggests that those in London are paying three times more and 85% of buyers in the North East are paying less than the national average.
So, despite the continued increase in house prices, owning a property is not necessarily off the cards for first-time buyers thanks to low mortgage rates and increasingly competitive lenders.
Buying a house for the first time can be daunting, luckily, our team of experienced advisers at Cornerstone Finance are here to help. From advice on your deposit, to finding out how much you can borrow, our advisers can help you navigate the property market. If you’re looking to purchase your first home, get in touch to see how we may be able to support you.