The number of first-time buyers in the UK has increased considerably over the past five years. Last year, they accounted for 36% of all residential property sales across the country, compared to just 26% in 2011. This rise is due to a combination of factors, most notably record-low interest rates, increased mortgage approvals, and the return of buyer-confidence. Additionally, there are a number of trends amongst first-time buyers that have played a part in this rise in activity.
A recent report published by ZPG (Zoopla) provides some interesting and valuable insights into first-time buyer behaviour in the UK for the period 2015-16. The results confirm a number of trends that we have noticed in our own dealings with first-time buyers over recent years, namely: average age; key triggers and barriers; and property preferences.
Average first-time buyer is older
Not so long ago, first-time buyers were mostly young adults—both single borrowers and couples—who had a small but sufficient deposit. Today, however, first-time buyers are more likely to be in their 30s, with an average of 75% now buying as couples. 37% of first-time buyers also have dependent children, which represents a 14% increase over the past 10 years alone.
The reason for these changes is because lenders now require a more substantial deposit, so it’s much harder for young adults to save the necessary funds to get on the property ladder. As a result, people are often renting for longer (great news for buy-to-let investors, but not so much for hopeful homeowners). Many first-time buyers also have to rely on their parents for deposits, especially if they have families or are trying to buy as single homeowners.
Key triggers for first-time buyers
The key trigger for first-time buyers is predominately being able to “make their own mark on a property.” Whether you’re currently a homeowner, a tenant, or living with your parents, this is something everyone can remember or relate to in some way. Whilst it’s entirely possible to make any house a home, rented or owned, there’s something unique about having full control and being able to do exactly what you want with your property, without asking for permission.
Closely behind this key trigger is not wanting to “waste” money on renting a property. It’s sometimes the only option—other times renting is the preferable and most suitable option—but many tenants do feel like they’re throwing money down the drain and simply lining someone else’s pockets, particularly when the monthly cost of a mortgage is comparable to the rent they’re paying.
Other common triggers for first-time buyers include reaching a certain age, the security of steady employment, the desire to start a family, meeting a partner, investing additional income, inheriting or being given money, and having to move out of their parents’ home. The most common barriers for hopeful first-time buyers, however, are found to be a lack of steady employment and being unable to save the required deposit.
Property preferences for first-time buyers
When choosing a property to buy, location is generally found to be the most important criteria—this comes as no surprise. First-time buyers, like most house hunters, base their property searches on the familiarity of the area, the safety of the neighbourhood, and ease of commuting to work. It’s also preferable that the property is within 10 miles of family and/or the location of their current home.
The least important criteria for first-time buyers is property type—i.e. new build vs existing or old property; flat vs house; detached vs semi-detached or terraced. Most are willing to compromise on the type of property and a garden to ensure their location preferences are met, so it’s clear that where they live has far more value and benefit than the age, style, and size of property purchased.
The importance of location is something we encounter every day when helping our clients to buy and sell. As one of the most desirable areas in Scotland to live, the demand for all types of property in the area is remarkable—it never subsides. Due to this unwavering demand, it can be a little more challenging for first-time buyers to get their foot on the ladder in East Renfrewshire—but when they do, however, their property will retain its value and desirability.
Register with a local estate agent
If you have a specific area in mind where you would like to buy your first property, it’s incredibly beneficial to register your interest and preferences with a local estate agent. That way, you’ll be kept up-to-date with local developments and alerted when any suitable properties become available.
At Nicol Estate Agents, we are in contact with many property developers located throughout Glasgow, East Renfrewshire, and the West of Scotland. suitable or other property types become available, helping you find your ideal home as quickly as possible.and we will let you know as soon as any