Reallymoving has launched a new First Time Buyer Hub with data and information for the FTB market, alongside guidance, advice and checklists to help them navigate the post-pandemic housing market.
The Hub shows data specific to the FTB sector in their local town and region, to help them build a picture of the housing market and understand how it’s performing monthly and annually.
Buyers can search by town to find out the average prices paid by FTBs in their location against regional and national benchmarks.
They can also check the proportion of FTBs in their town that are buying new build homes through the Government’s Help to Buy scheme and the proportion using Shared Ownership.
“Buying a first home might feel daunting at the moment, particularly for First Time Buyers who have little experience of the housing market but who now find themselves trying to predict what house prices are going to do next and judge whether it’s a good time to buy”, said Rob Houghton, CEO of reallymoving.
“More than ever they need reliable data to help them make informed decisions.”
Average FTB prices
The Hub shows that the average price paid by a First Time Buyer in the UK in June 2020 was £245,900, up 3.1% from £238,632 in March, when the country went into lockdown.
All regions of England and Wales have seen average prices paid by FTBs rising between pre and post-lockdown (March to June) with Scotland and Northern Ireland the only locations where prices have fallen since the property market reopened.
Despite challenges securing higher loan to value mortgages, the data suggests that FTBs who are in a position to buy are keen to press ahead, perhaps spurred on by the experience of lockdown spent living with family or in rented accommodation, with competition for limited stock driving up the average price paid.
This competition for property is likely to increase following the announcement on 8th July of a stamp duty holiday, prompting buy to let investors to return to the market.
% FTBs vs home movers
First Time Buyers currently make up 55% of all home purchases across the UK, down slightly from the peak of 57% in April 2019.
This figure is highest in London where FTBs make up 67% of all homebuyers – and lowest in the South West where they constitute exactly half of the market (50%).
Help to Buy could present negative equity risk
In June 2020, 43% of UK First Time Buyers used the Government’s Help to Buy Equity Loan scheme to get onto the housing ladder with a smaller deposit, even though using the scheme could increase the risk of ending up in negative equity if house prices fall.
Help to Buy Equity Loans can seem like a lifeline for those struggling to raise a deposit, enabling them to buy a new home with just 5% equity, topped up with a Government loan of 20% (or 40% in London) which is interest-free for the first five years.
But recent moves by lenders to withdraw higher LTV loans could tempt buyers who now find their deposits are insufficient to opt for a new build using Help to Buy, increasing the risk of negative equity if there’s a price correction in the near future.
Rob Houghton said: “Buying a property is rarely straightforward but now more than ever First Time Buyers need to be well informed and have carried out careful due diligence on their local market.
“So far house prices across the UK have held up surprisingly well in light of the pandemic and resulting lockdown, but it’s unclear whether the longer-term outlook will remain stable, particularly after the furlough scheme comes to an end this autumn.”
“The First Time Buyer Hub is a one-stop-shop for new homebuyers, giving them easy access to all the information they need for their local area at their fingertips, alongside regularly updated guides, tips and checklists.”