Under-35s are most likely to take advantage of falling property values
First-time buyers are split on whether to buy now or wait until the economic downturn is over, according to a new survey.
Half of would-be homeowners said house prices would need to drop by 20% for them to think about buying.
A study by the price comparison service and switching website, uswitch.com, found that first-time buyers under 35 were most likely to take advantage of falling house prices, to get on the property ladder – 61% of 25-34-year-olds were the most eager to buy within the next five years.
To gauge how would-be buyers were feeling, the website surveyed 2,000 first-time buyers for their thoughts on the 2023 mortgage market.
Only 41% of first-time buyers of all ages planned to buy within the next five years, and 43% did not plan to take advantage of any government help schemes.
Kellie Steed, mortgage expert, at uswitch.com, said: “There is no doubt that it’s a challenging time for first-time buyers, despite a gradual fall in both property value and fixed-rate mortgages. Given that the average price of a home in the UK is currently £294,910, prospective buyers who are not yet on the housing ladder must save hefty deposits in order to qualify for the best interest rates.
“Declining house prices could mean now is an opportune time for some first-time buyers to make their first steps on the property ladder, using one of the government’s homeownership schemes. While the Help to Buy Scheme ended for applicants in England in October 2022, the First Homes Scheme and Shared Ownership Schemes may be valid options for some. The Deposit Unlock Scheme has also been extended until the end of this year.”
She added: “It’s feasible, however, that some first-time buyers will still find it more economical to purchase a home at the end of 2023, given that both home prices and fixed-rate mortgage rates are anticipated to continue dropping throughout the year. Whether you would benefit more greatly from buying now or later, will depend mostly on your individual circumstances, so it’s a good idea to chat with a broker before you decide to buy.”
Read more: Home loans for first time buyers in the UK
Half of those surveyed who were not looking to buy in the next five years, said house prices were holding them back, while the second biggest reason for not buying was not being able to pay a deposit.
Overall, 42% of first-time buyers felt the downturn would decrease their chances of owning their own home.
Regionally, the North East had the highest percentage of prospective buyers who believed the current economy would boost their chances of purchasing a home during the next five years - 36%, whereas nearly half, 48%, of those in the South West said the recession would hurt their chances.
