Copy article

First-time buyers

Journalist: Melissa Lawford, The Telegraph

ended 12. December 2023

How strong are first-time buyer numbers? Are they the most resilient buyer group in the housing market? Why are they still buying even when mortgage rates are so high, is it because soaring rents are a massive push to get on the property ladder? What is happening to landlord buyer numbers at the same time? Why are high rents not enough to tempt landlords into the market?

6 responses from the Newspage community

Copy all

Copy

Editor
Samuel Mather-Holgate
Independent Financial Adviser at Mather and Murray Financial
With rents at this level, home ownership still seems like a good bet, despite interest rates at their highest level for 20 years. First time buyers generally show good financial discipline, being able to commit to rental payments in the past and save a deposit for a purchase. This tends to mean they aren't put off by high interest rates. Some first timers are getting help from parents and this has kept activity in the sector at decent levels compared with home movers and those needing larger mortgages.
Copy

Editor
Craig Fish
Director at Lodestone Mortgages
We have recently seen an increase in the number of first-time buyers' enquiries. The main reason for buying is because it is actually still cheaper to buy than rent. With the increasing rental costs, caused mainly by the higher interest rates and stress test calculations that lenders use, renting has become unaffordable. For those who are lucky enough to have a deposit, be it from their savings or the bank of mum and dad, buying is the preferred route, despite the higher rates that will apply. We have also started to see more landlord enquiries, so I do feel that buy-to-let isn't dead and could see a resurgence in popularity in the coming months.
Copy

Richard Campo
Founder at Rose Capital Partners
We've seen quite a resurgence in First Time Buyers in the latter part of the year. That is quite normal at this stage of the cycle - house prices dip for whatever reason, the market waits and see's, once prices to get a level FTB can afford, they jump at the chance to finally get on the ladder, which bolsters prices and we are off again on an upward cycle - Exactly how long this takes depends on the drivers that led prices to dip, but in this instance, it has been driven by people adjusting to higher interest rates than we have seen in the last 13 years, but the realization is dawning that rates aren't 'high' in historical terms (in fact below average, as the Base Rate has averaged 5% in the last 100 years) and this could well be the norm for the foreseeable future.
Given the huge rise in rents over the last year or so, that is another big push factor as buying will be cheaper than renting now.
The tax position is really against landlords so until that changes, this will be the norm
Copy

Gary Bush
Financial Adviser at MortgageShop.com
First-Time-Buyers are unusually active for this time of year, our feelings are that having delayed all year a decision to buy having seen the mortgage rates drop back they are now jumping in. Historically it's usual for first-timers to be out in force in January, a lot of couples gazing into each other's eyes on New Year's Eve does make for some "we must buy a place for ourselves" as a New Year's Resolutions. For 2024 we think that it could well start to look like business as usual for the property and mortgage market by about April - the storm appears to be subsiding. Landlords purchasing more properties is quite rare of late due to many factors starting with George Osborne's tax changes, leading to tricky to overcome affordability calculations, and ending in higher lender rates and charges. Landlords can see the rising rent levels as an incentive however a lot are holding off to see what happens post-election with no-fault evictions and other tenancy agreement changes.
Copy

Charles Breen
Founder at C B
First time buyer numbers are very strong, as they have not known any other market this is normal to them, they are seeing good value in houses and are thinking if they can afford the payments then why wouldnt they as it provides them with security and stability. current home owners are like some middle aged man after being on a 3 day bender at a wedding and now suffering and regretting their lifes decisions, while first time buyers are akin to a spritly 20 odd year old who was on a green tea detox for the last month, full of optimisim and vitality raring to go and get on with the next challenge which is the journey to home ownership.
Its only us current middle aged home owners who are currently scarred and in the feotal position after the slash and burn antics of the BOE cos playing freddy Krugar
Copy

Jamie Thompson
Mortgage Broker at Jamie Thompson Mortgages
It’s hardly surprising that young people continue to want to buy their first home. Mortgage rates are higher than they were compared to the record lows we previous had, but let’s be honest, they are now not excessively high.
Buying is often still cheaper than renting in most cases. Young professionals’ collections of house plants are now simply over growing their 2 bedroom flats and they want a garden.
Even though owing is a lot less flexible than renting there is still a sense of freedom that comes with owning your own place. My largest motivation to escape renting and buy my own place was that, and I’m being serious, I wanted to have a dishwasher. It’s the simple things.