Data from last year is revealing that there has been a significant increase in the contribution to the housing market from first time buyers. It has been reported that during 2021, their contribution increased by just over £27 billion in a single year with first time buyers contributing over £86 billion. In 2020 295,390 first time buyers entered the market, to move house and this shot up to 397,232 in 2021. Looking at the data regionally, the South East saw the largest increase in buyers in this category, with 24,416. London came in second with 18,717 and the North West with the third highest number of first time buyers at 8,698.
Of course, not only has the volume of first time buyers increased but the average price paid by a first time buyer has increased by around 9%. So all in all, with the annual increase in number of buyers and the increase in average property value, first time buyers are accounting for a very substantial sector of the housing market.
There have been a number of factors which have led to this extra activity amongst first time buyers. In particular, low borrowing costs and government guarantees for mortgages may have provided the right type of conditions for many more to get onto the first rung of the property ladder.
The government’s introduction of the stamp duty holiday, which was phased out by the end of September last year, has stimulated a lot of activity across the entire housing market. First time buyers are of course exempt from stamp duty for the first £300,000 of their property’s purchase price. However, in the areas of the country where property peaks above this sort of value, London and the South-East, the cost saving would have kicked in to support first time buyers onto the property ladder.
Equally, the periods of time spent in lockdown in many ways reduced people’s spending. Not being able to go on holidays, eat out or attend social events etc did offer up the opportunity for some first time buyers to speed up the rate at which they were able to save towards their deposit for a home.
Looking back historically over the data, the last time first time buyer’s levels peaked was back in 2002- 19 year ago. Will the rate of first time buyers entering the property market continue? We’ll have to see how 2022 fares.
No matter how many times you’ve moved house, if you have another house move on the horizon, we’re here to help. Burke Bros Moving Group can arrange a stress free and smooth house removal by professionally trained removal crews. To obtain a no-obligation quote for our services, please contact our advisors on 01902 714555 or via sales@burkebros.co.uk.
