Improved conditions expected for buyers this year
The number of first-time buyers entering the UK mortgage market hit a decade low, according to a report by Yorkshire Building Society.
The report has revealed that approximately 290,000 individuals became first-time property owners in 2023, reflecting a more than 20% drop from the previous year’s total of 370,287.
The mutual pointed out that the total for 2023 was the lowest since 2013 when 260,000 first-time buyers entered the mortgage market.
In 2021, the number of first-time homebuyers surged to a two-decade peak, surpassing 400,000 individuals. However, borrowing costs saw an upswing as the Bank of England initiated interest rate hikes in December 2021, aiming to curb inflation.
Despite the challenges they were facing, first-time buyers were eager to step onto the property ladder, noted Ben Merritt (pictured), director of mortgages at Yorkshire Building Society.
“First-time buyers are the lifeblood of the market and are still clearly keen to buy,” he said. “The wider market relies on them, not least to support purchases higher up the chain.”
Looking ahead, analysts anticipate an improvement in conditions for buyers. Recent months have seen a relaxation in mortgage rates, driven by decreasing inflation and expectations of interest rate cuts by the Bank of England this year.
“Current market expectations suggest several rate cuts in 2024, which would ease mortgage rates in the first half of the year,” added Max Shepherd, group economist at Yorkshire Building Society.
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