Interesting Times For First-Time Buyers

With the stamp duty holiday tailing off, there is a strong chance first-time buyers will come back to the market in larger numbers. At Williams of Petersfield, we have seen a drop-off in activity from first-time buyers, but we believe this is set to change soon.

This has been a challenging time for many buyers

Yopa commissioned Censuswide to speak to 2,000 people, all planning on buying their first house in the next year. The study found:

  • 70% of respondents have been furloughed at some point in the past year
  • One in six respondents have lost their job because of the pandemic
  • More than 50% of respondents have experienced a collapse of a property deal in the past year

Mike Scott, Chief Analyst at Yopa, says: “Delays in moving due to the recent situation are obviously going to exist. But the extent of the delay reported by potential first-time buyers suggests that there is still pent-up demand waiting for the restrictions to be eased further, for furloughs and job uncertainty to end, and for people to return to full-time work for full-time salaries.”

Other findings in the study include:

  • One in three homebuyers are happy to wait until the stamp duty holiday ends to be active in the market
  • 22% of respondents said the stamp duty holiday hasn’t impacted their plans

Mike Scott also said; “At Yopa we do not expect an immediate national fall in prices once the stamp duty holiday ends. We believe that the lifting of Covid-19 restrictions – combined with people’s reassessed post-pandemic housing needs, the ‘accidental savings’ that many have made over the past year and the desire for a post-pandemic fresh start – will keep house prices high for at least for the rest of this year. There may well be price decreases in some market sectors, such as inner-city flats, but these will be more than outweighed by price rises for property types that are in high demand for the post-pandemic lifestyle.”

Are you looking to move soon?

Some of the leading concerns cited by respondents include:

  • The size of deposit required to buy a home
  • A lack of suitable and affordable mortgage products
  • Additional criteria restrictions placed on attractive mortgages
  • One in five buyers plan on using the new Government backed mortgage guarantee scheme
  • 85% of first-time buyers plan on using some form of Government assistance to buy a home
  • 13% of respondents said commuter links are less important now than they were before the pandemic
  • 75% of respondents listed outside space and fast broadband as being of the utmost importance

Neil Weston, Principal of Scout Financial Services, Yopa’s mortgage broker partner, says: “In general, we expect prices will rise further rather than falling in the second half of this year after the main stamp duty holiday ends. Those first time buyers who are hoping for prices to fall after the holiday ends are likely to be disappointed and may end up paying even more.”

Neil concluded by saying; “80% of the first-time buyers Yopa surveyed said that they were priced out of the initial area they were hoping to buy in; alarmingly, even 77% of those with household incomes exceeding £75,000 said the same. If first-time buyers are still hoping to get on the property ladder in 2021, they should really be getting their ducks in a row now to avoid being further priced out later in the year.”

At Williams of Petersfield, we aim to support the Petersfield community as much as we can, and we know this is an extremely trying time. A lot of people are looking for support and guidance, and if you have any property or housing related questions, we are more than happy to assist you, so contact us today.

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