Number of first time buyer houses increased in 2021
The number of UK first time buyer houses continues to rise year on year. In 2021, the number reached the highest level since 2002.
As buyer confidence returned, the number of buyers went up.
It was estimated there were 408,301 first-time buyer transactions in 2021, which was a 35% increase from the 303,000 first-time buyer transactions in 2020. Both of these figures were more than twice the levels that were seen during the 2007/2008 financial crisis.
As previously mentioned, this was a magnificent increase from 2002, which marked the first peak in first-time buyer transactions. 531,800 households purchased a property and entered the housing ladder for the first time.
It took more than 15 years for those numbers to repeat themselves. Interestingly, despite a prosperous year in 2002, 2006 saw a sharp decline with only 400,900 first-time buyers.
It is always interesting to take a note of how first-time buyers interact with the property market at different periods in time. House prices hit record highs in 2021, which did deter the bulk of first-time buyers. There were many who found it difficult to purchase their first home. Understandably, the coronavirus pandemic, which took place during this time, was considered to be a compounding factor in preventing more first-time buyer interactions. People had to change financial situations, massive debt, and uncertainty about the future of certain industries and jobs, which did slow down the number of first-time buyers.
However, it is worth noting that a broad range of factors routinely influence first-time buyer interactions and dictate how many people manage to successfully navigate the property market. There are many schemes on a regular basis such as government guarantees for mortgages, low borrowing costs, and holidays on stamp duty which help first-time buyers to successfully enter the market by saving as much money as possible.
When examining the property market, the impact of the coronavirus pandemic cannot be ignored. It continues to influence the property market in small ways to this very day.
Naturally, as the pandemic had serious economic consequences for the UK, it’s not difficult to see how the property market would be similarly affected.
To give an example, the pandemic meant that there was reduced spending across the board. Many people were not able to spend as much money as they normally would because the bulk of retail services was closed down, which meant that there were much higher savings going on. People were, therefore, able to get larger deposits than they initially thought possible because they didn’t have as many outgoing costs.
The first-time buyer is always an important part of the property market, but in 2021, half of all purchases with a mortgage were from first-time buyers. This is roughly the same percentage that was seen in 2020 but is a radical step up from past years. Between 2006 and 2011, the figure for first-time buyers who had a mortgage was only 40% at best.