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First-time buyer market to drop by a fifth

Journalist: Jake Carter, Mortgage Introducer

ended 11. October 2023

The number of first-time buyers getting onto the property ladder is set to fall by 22% this year, according to Halifax.

How will this impact the wider housing market?

What could be done to enable more first-time buyers to accessing the housing ladder?

What are you advising first-time buyers at present?

8 responses from the Newspage community

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Michelle Lawson
Director at Lawson Financial
First Time Buyers (FTB's) and Investors are generally the 'chain starters' so with Landlords being pushed out of the market with heavy legislation and Section 24 tax changes, it is over to the FTB's. Affordability, stress testing, interest rates are a challenge but the same task of saving for a deposit is still there as it has been for years. There are numerous schemes to help FTB's such as Joint Borrower Sole Proprietor, Skipton's Track Record Mortgage etc however these only generally help a small proportion due to the lending restrictions. What we really need is a dedicated Governmental Housing department that is seen as a serious and senior post and a massive overhaul otherwise there is only one way this is all going to go. With a General Election looming, this could be a serious vote changer. If only the Government would listen........or maybe they just don't want to as it doesn't meet the overall 'agenda'.
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Stephen Perkins
Managing Director at Yellow Brick Mortgages
Whilst i take Halifax’s prediction with a large pinch of salt, there is no doubt a reduction in the number of first time buyers able to afford property at current market prices. With this foundation stone being reduced the whole market will become imbalanced and topple with many properties for sale and not enough buyers. This should lead to a much needed price correction to stabilise the market and get people moving again.
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Lee Gathercole
Co-Founder at Rebus Financial Services
The recent fall in first-time buyer purchases isn't great they play a big part in property market. Unless we start to see schemes similar to the help to buy which has recently ended, properties are only to become out of reach to the average first-time buyers unless you have a substantial deposit. We are advising our first-time buyers to really laser focus on the monthly payment of their new mortgage if they are considering buying now and using this to dictate their property value budget. I would also avoid trying to guess the market waiting for property values to drop could be disastrous, as if they were to rise then properties would really escape you.
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Steven Hargreaves
Mortgage and Protection Adviser at The Mortgage Co
If the prediction is correct it is worrying for the housing market as a whole, the buy-to-let market is suffering, and we need both first-time buyers and buy-to-let landlords at the bottom of housing chains to progress chains upwards.
We have all read lenders' negative economist forecasts over the last few years, especially during COVID-19 times, and hopefully, the Halifax economist will be like so many other lenders' forecasts, which have proved to be wrong.
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Peter Stamford
Mortgage Expert at Stamford Home Finance
In the current property market, first-time buyers are more important than ever. They're the ones who kick-start the housing chain, and right now, they're struggling. With costs on the rise and fewer government schemes to help out, it's vital to look at your monthly budget, not just the daunting deposit. Waiting for a market dip could backfire if prices surge instead. What we really need is a government that puts housing at the top of its agenda. Without that, we're all heading for a tough time in the property market. So, let's get real about solutions
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Adam Smith
Founder at Alfa Mortgages
This suggests a potential boon for investors, provided that rental incomes align with the lenders' affordability calculations and stress tests.
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Austyn Johnson
Founder at Mortgages For Actors
I'm afraid I don't believe that. There are new houses popping up all over the place and people will buy them. Sometimes 2 years before they are finished! When inflation has settled, I expect the gov to launch a few more incentive schemes that are actually relevant. People are just being wary, nothing is ever linear.
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Christian Duncan
Managing Director at Manchester Mortgage Centre
In the middle of 2023 we weren’t really speaking to many first time buyers as they were all sitting tight in the hopes that rates would come crashing down!

This didn’t happen and as a direct result we have submitted 4 first time buyer applications in the first week of October. Moving forward I see first time buyer approaching the market with caution and rightly so but there is definitely movement within the market.