First-time buyers demand housing action as half are forced to consider homes with no natural light

  • First-timers increasingly willing to compromise living space to get on the ladder: 51% say natural light isn’t vital in a first home, 63% would go without a bath, 93% happy without an ensuite bathroom
  • First-time buyers want to clamp down on land banking and make it easier to convert buildings to residential use, while one in ten want to build over high streets and golf courses
  • However, February sees 21,000 first-time buyer completions, up 11% from 19,000 in January

The housing crisis is creating growing anger and desperation among would-be first-time buyers, with over half now willing to forgo natural light in their search for an affordable first property, according to the latest First Time Buyer Opinion Barometer from Your Move and Reeds Rains.

When asked about the requirements that they consider to be ‘vital’ in a first home, only 49% of first-timers cited natural light as essential. Just 54% said a garden as mandatory, and 55% a car parking space.

With the average price of a first-time buyer home now £143,767 as of February, first-timers are more willing to sacrifice spaces including garages, dining rooms and utility rooms in order to save on costs.

Just 7% of first-time buyers said an ensuite bathroom was an essential requirement to a first-home; while 14% said a garage was mandatory, and just a third (30%) viewed having a dining room as vital. Staggeringly, 11% of first-time buyers said a kitchen wasn’t vital in a new home.

Adrian Gill, director of estate agents Your Move and Reeds Rains, comments: “First-time buyers are willing to sacrifice space and comfort in their quest to buy a first home. But this shouldn’t be such an arduous task – these findings should send a warning flare out to our politicians that many first-timers are tripping up along the path to homeownership, despite much improved access to finance.

“There is only a finite stock of housing on the market, and unfortunately, first-time buyers are the least prepared in the current scramble for property. The lion’s share of new housing policy has been stoking demand, rather than supplementing supply, with the Help to Buy ISA the latest in a host of flagship first-timer policies. But building initiatives remain largely untouched, leaving enormous potential to revise and improve housing policy.

“Of course, there is a flipside. Such strong buyer demand means now is a fantastic time for sellers to put property on the market, with affordable properties likely to be snapped up quickly.”

In their bi-monthly survey, Your Move and Reeds Rains asked first-time buyers what policies they would accept to encourage more housebuilding. Four in ten first-timers (41%) would accept legislation to prevent land banking – when developers buy a plot of land for development but don’t build on it straight away. And over a third (37%) think it should be easier to convert existing buildings to residential use.

One in seven (14%) first-timers believe more pre-fabricated ‘kit’ houses should be used to build new houses rapidly, while 11% would accept converting high streets to residential property, and  a tenth (10%) would happily build over golf courses. A twelfth (8%) of first-timers say that the greenbelt boundaries should be adjusted, 8% believe building height restrictions in city centres should be removed, and 8% think the size of new-builds should be limited, in order to build more smaller homes on the same available plots.

Adrian Gill, director of estate agents Your Move and Reeds Rains, explains: “The housing crisis cannot be conquered by timid tweaking of the system – radical action is required.

“Recalibrating the way we use land will form firm foundations for more affordable housing. Potential policy changes could include legislation against land banking and in doing so making it easier for landowners to build on their land banks by easing planning restrictions. Building on green spaces in urban centres is another option, and – at the more controversial end of the spectrum – adapting the green belt boundaries. Supporting smaller builders will also play a part, to encourage more quality first-timer homes, in the locations that we need them.”

FIRST-TIMERS AND THE GENERAL ELECTION

For tenants, housing and healthcare still tie as the issues most likely to influence their vote at the General Election in May. In February, one in six tenants (16%) said that housing was the issue that would be most likely to affect their vote, while 16% reported healthcare as their foremost concern – with both percentages unchanged from December.

However, the political build-up has had relatively little impact on appetite for property. More than eight in ten first timers (80%) said that the upcoming General Election has had no impact on their decision to buy in February, up slightly from 78% in December.

FIRST-TIME BUYER COMPLETIONS FALL ANNUALLY

There were 21,000 first-time buyer completions in February 2015, 10.5% more than 19,000 in January but 5.8% lower than 22,300 twelve months ago.

Meanwhile, the average purchase price of first-time buyer properties was £143,767 in February, 0.8% higher than a year ago. First-time buyer deposits averaged £25,080 in February, 1.5% higher than £24,721 a year before, despite additional support for higher LTV borrowers in the form of Help to Buy.

However, the latest Mortgage Monitor from e.surv revealed a recent uptick in house purchase approvals to borrowers with smaller deposits. Borrowers with deposits worth 15% or less of their property’s value accounted for the largest portion of house purchase lending in five months in February.

Adrian Gill, director of estate agents Your Move and Reeds Rains, comments: “First-time buyers came back to the market in force in February, and mortgage lending data suggests this revival will carry through into the next few months. Wages are recovering, just as inflation has fallen to zero for the first time in decades, helped by cut-price fuel costs. Many buyers are feeling richer as a result, and they are looking to take advantage of cheap mortgage rates now, before prices have the chance to climb higher.”

REGIONAL DIFFERENCES

In February, the average first-time buyer in London and the South East was 31 years old and earning £46,200. This compares to an average first time buyer age of 30 years and income of £33,100 in the rest of the UK.

The average purchase price paid by first-time buyers in London was £300,354 in the three months to February 2015, while Northern Ireland was the cheapest region at an average of £96,068.

* This is the total number of FTBs in the three months to February 2015. Based on CML regional data (released 25th February 2015) on the number of FTBs in Q4 2014 – grossed up to reflect growth in FTBs recorded by Your Move and Reeds Rains between Q4 2014 and the three months to February 2015.

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