As house prices continued to increase to an average of £165,838 at the end of 2003, the average person is now not buying their first home until the age of 33 and the number of under 25s buying a home has fallen to a low of 10.5% .
The percentage of total sales to first time buyers was an average of 16% in 2003 . However according to SmartNewHomes, the percentage of sales of new homes to first time buyers was 29%, indicating that new homes are proving an attractive option for buyers taking their first steps on the property ladder.
Why first time buyers are buying new homes:
- Deposit
Some developers pay up to a 5% deposit to help first time buyers purchasing a new home. This is a common stumbling block to getting on the ladder.
- Stamp Duty
Stamp duty is payable at 1% on properties valued over £60,000 which can be a hefty additional cost for many buyers. Developers including Barratt Homes offer packages whereby they pay the stamp duty for you.
- Furnishings & white goods
New homes have brand new fitted bathrooms and kitchens and often come complete with fitted appliances including fridge freezers, ovens and washing machines which can be a hefty additional cost up front. Some properties are even complete with fitted carpets and curtains meaning that buyers can move straight in.
- Low maintenance
A newly built home comes with a ten-year NHBC guarantee and requires a minimum maintenance and therefore lower costs than an older home.
- No onward chains
Buying direct from a developer means that you are not reliant on an onward chain of buyers and sellers, which significantly speeds up and simplifies the buying process.
- Tailor made
Developers are specifically building to meet the requirements of first time buyers, by building smaller one and two bedroom homes or studios in inner city schemes.
- Shared ownership
Several developers are looking at shared ownership schemes whereby the buyer only purchases part of the equity of the property and the developer retains the remainder, with the buyer having the option to buy the rest at a later date. For many first time buyers this is an ideal way for them to buy a property on their own.
Malcolm McGeary, Sales and Marketing Director of Barratt Homes comments: “We recognise how important first time buyers are for the industry and so we have a range of policies to help them. We work on an individual basis to develop tailor-made purchase plans, help with legal and mortgage arrangements and sometimes contribute towards the deposit.”
David Bexon, Chief Executive of Smart New Homes comments:
“There are a huge number of young people desperate to purchase their own homes and stop throwing ‘dead money’ away on rents. This represents a lot of potential new business for the house building industry. They might be first time buyers today, but once part of the home owning community they are lifelong customers for the industry. Today’s first time buyer is tomorrow’s deluxe development purchaser.”
