It transpires first-time buyers are focusing on buying larger homes as opposed to one and two-bedroom flats. Two-thirds of buyers making their first foray into the market are looking to buy a home, according to Zoopla figures. When the data for London are removed, this group rises to 80%, which is a sizable proportion of first-time buyers.
Richard Donnell is the Research and Insight Director at Zoopla, and he said; “First-time buyers are not compromising on the size and price of a home. Our analysis suggests that they are taking the long-term view and buying a home with a longer time horizon than they may have done in the past.”
First-time buyers are the largest group of buyers
The same study also suggests that first-time buyers are expected to remain the biggest purchasing group in the market for 2019. In 2018, first-time buyers accounted for 36% of sales, and the importance of this market to vendors, and the market as a whole cannot be overlooked.
There are reasons why first-time buyers are looking to purchase larger homes.
The average age of the first-time buyer has risen. Therefore, these buyers may be more comfortable with moving into a larger property, or they could be closer to the stage where they needed a larger home. When the average age of first-time buyers was younger, there was a notable gap between what first-time buyers required and the need to move into something more substantial to house a family. Nowadays, the difference is less pronounced, and many first-time buyers believe they can miss out the expected first-step.
First-time buyers can save money by missing a step on the property ladder
There is also an opportunity to minimise some of the overall cost of the buying process. Someone who buys two properties in ten years will end up paying two lots of estate agents fees, two sets of solicitors’ fees, two amounts of removal costs and many other duplicated fees. However, by moving into a larger home, and only moving once, the buyer removes some of these costs.
Yes, the overall cost of buying the larger home makes buying a first property more expensive, but by missing out a purchase in the buyers’ progress, there is a substantial saving to be made.
Of course, many first-time buyers still find themselves stretched, and one way these buyers are making the process is by opting for a larger mortgage. Compared to a decade ago, the number of buyers arranging a 30-year mortgage has risen sharply. This style of mortgage has increased, as buyers move from the traditional 25-year mortgage to something slightly longer.
Finding the right mortgage can be a challenging process. If first-time buyers are buying more substantial homes, they need a bigger loan, and this places some buyers under more significant pressure. However, there is help available, and first-time buyers are finding solutions which allow them to step on to the property ladder.
At Mortgage Simplicity, help is available for first-time buyers, looking to step on the property ladder.