First-time buyers, often cited as the lifeblood of the UK housing market, are becoming less likely to buy a home than movers.
The times are changing, and researchers have predicted that movers are more likely to buy than first-time buyers. Property portal, Zoopla reported for more than a year the highest proportion of sales was people buying for the first time. But, now with the squeeze on mortgage lending and the growing interest from movers, the dynamic will change for this year and the next.
During lockdown, many reconsidered their domestic situation, particularly as many moved to remote working. The hierarchy of what’s important to many has changed and the importance of garden spaces and proximity of family has risen to the top of the priority list. Consequently, this has led to some homeowners looking around for an alternative property.
Contrastingly, first-time buyers who have previously dominated the housing market, have seen their options reduced as lenders are being forced to tighten their criteria for being able to grant a mortgage. An increase in a larger deposit and employment security being at the forefront.
The result of this trend, according to Zoopla, is that movers will be the more likely buyers at the end of the year.
Government incentives, like the stamp duty holiday led to a surge for property portals and estate agents once lockdown restrictions were lifted. Case studies from first-time buyers cited that though the viewing process was not straightforward, the deals went through quickly.
As of August, sales agreed on homes with two bedrooms or less were up 36% (excluding central London). Rightmove’s director said it was due to homes finding a buyer in average of 53 days, seven days quicker than last year.
The demand is expected to be reduced as mortgage restrictions begin to feed through. Post-lockdown, Zoopla reported that first-time buyers were already starting to dip, but that the movers were staying strong. Whilst they remain a key buyer group, the lower availability of higher loans means there will be a shift of home buyers in 2021