Record figures for first-time buyers
With all the political turmoil in the country over the last few months, anyone would be surprised to hear property sales have broken records this year. Buy they have, and they come via the first-time buyer proportion of the market. We look at the numbers and the reasons why…
Brexit boost
One of the main reasons why first-time buyer sales have been so buoyant comes down to Brexit. The fact many are pausing their property sale or purchase until after Brexit has been resolved, has made the overall market quiet. And with that comes more choice and less competition, something first-time buyers have been taking advantage of. The estate agent trade body NAEA Propertymark shared figures for the month of September, which showed the proportion of homes sold to first-time buyers increased to 30% of all house sales. This figure is one of the highest since February and compares to 22% for the same month last year.
Landlord tax increases
The introduction of the tax increases on landlords which the government brought in this year have also helped the first-time buyer figures. The tax increases have led to fewer landlords looking to expand their property portfolios as well as some landlords leaving the rental sector all together. Historically, both landlords and first-time buyers would be looking to buy similar properties. With fewer landlords buying, first-time buyers have had even more choice.
Government schemes
Of course, we mustn’t forget the incentives which have been in place over the last couple of years to help get first-time buyers on the property ladder. Figures have certainly received a boost thanks to schemes like the Help to Buy equity loan initiative and the Help to Buy ISA. The new rules on Stamp Duty exemption have played their part too, with first-time buyers only needing to pay stamp duty on homes over £300,000. When you take everything into account, plus the competitive mortgage offers that are available on the high street, it’s been a good time for first-time buyers to make their move.
The record figures
Looking at the numbers as a whole, the figures coming from first-time buyer sales have been the highest they’ve ever been in twelve years! You have to go back to before the financial crisis to see similarly strong figures. UK Finance shared figures recently to show that in the month of August this year, a total of 3,510 mortgages were advanced to those buying their first home. This figure alone is the highest monthly total since August 2007 and before the recession. And looking at the whole of last year, 2018 saw over a third of property purchases (36%) made by first-time buyers. Compare that to 2010, and that’s a jaw dropping 85% increase! It’s most certainly clear that first-time buyers have been helping to keep the property market positive and buoyant through the tougher times of late.
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