First time buyer market has bounced back, says report

The latest quarterly Property Market Intelligence Report published by Reallymoving finds that the first time buyer market has bounced back to pre-pandemic levels despite rising house prices. 

The report, which collected data from 27,000 conveyancing quotes completed by buyers and sellers in Q2 of 2021, gives more nuanced insights into the housing market today and provides greater context around property price data.

Despite some commentary suggesting that first time buyers are being priced out of the market from unexpected house price rises in the last 12 months, Reallymoving’s data shows that figures have now returned to pre-pandemic levels and are currently sitting at 55% of market share compared with 51% in 2020. One reason for the rebound is that although prices are up, affordability due to competitive mortgage rates remains normal, with mortgage payments costing 31.1% of take-home pay.

The report also shows that the double digit house price inflation reported by other research indices is mostly due to activity amongst those upsizing or investing and does not include first time buyers. Reallymoving’s report shows that first time buyer inflation is actually lower (2.5% annually, vs 10% for upsizers). This is largely due to first time buyers generally purchasing cheaper properties and needing to rely on a mortgage.

The report highlights vast regional differences when it comes to house prices. Average house prices are often reported as being £250,000 across the UK, but data from the Reallymoving report suggests that 85% of buyers in the North East are paying less than the national average, and those in London are paying three times more.

So while rising house prices remain a challenge for first time buyers, low mortgage rates and increasingly competitive lenders are opening up the market and creating more options for new homebuyers.

Rob Houghton, Chief Executive of Reallymoving said:

“Our new property price analysis by home mover type shows that despite a seemingly unusual year in the property market, there are plenty of opportunities this year for those who want to move, even after the Stamp Duty holiday has ended. We want everyone to feel that their moving home goals are achievable and not be put off because they were looking at data that was too general. Average property price data is not helpful without context, so we have looked at property prices and inflation by location as well as by category of mover.”

Today's Conveyancer