First-time homebuyers lean towards smaller properties, survey suggests
A new survey found uncertainty surrounding mortgage rates and house prices remain the primary obstacles for aspiring homeowners, with 31% and 29% of respondents, respectively, citing these as notable barriers in their decision making.
e.surv’s Property Watch report is a monthly survey that looks at the views of surveyors on the UK property market. For December, e.surv has investigated the considerations and strategies being taken by first-time homebuyers.
The survey found first-time buyers tend to consider smaller, more manageable properties, with two-bedroom resale terraces emerging as the most sought-after option. The trend demonstrates a desire to balance affordability with living space, especially in London, having recorded 22% of respondents stating parental assistance to be crucial in securing a home.
Buyers have been exploring a range of financing options when given less support from the bank of Mum and Dad, with 18% considering affordable home ownership schemes, 16% indicating willingness to extend mortgage terms, and 16% expressing being open to exploring less expensive neighbourhoods.
Changing market conditions
In the new homes market, supply is slowing down as recent data shows only 235,000 new homes have been added. The report has attributed the slowdown to the end of the Help to Buy scheme, which had helped assist first-time homebuyers.
Also, buyers have been considering their priorities, with affordability remaining to be the main concern, particularly for first-time buyers. To address these concerns, builders have been offering buyer incentives, and these incentives are often designed to assist buyers in overcoming upfront costs, including taxes, legal fees, and deposit contributions.
“As the housing market continues to evolve, understanding the changing preferences and strategies of first-time homebuyers is critical for real estate professionals and policymakers alike,” stated Rob Owens, head of research at e.surv.
“With interest rates for home purchases projected to fall in 2024, the prospect of homeownership may become more attainable for a wider pool of potential buyers. The survey findings underscore the resilience and adaptability of first-time homebuyers actively seeking solutions to navigate the current market challenges and achieve their homeownership aspirations.”
First-time buyer transactions remained at 29%, just below the ten-year average of 31%. Short supply continues to hamper the rental market, with Scotland being particularly affected by unintended consequences of the government's rent cap policy.
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