If 2023 taught us anything, it is that the mortgage world can change in the blink of an eye, with interest rates going up and down, consumer confidence continuing to move and house prices not falling as much as some expected.
First time buyers made up an estimated 54% of all the home buying transactions that took place in 2023 and could continue to remain at this level in 2024. The tide could be turning in favour of these new entrants to the market with 1 in 4 sales in November 2023, as an example, being agreed at 10% or more below asking price, and for some the prospect of buying has become more attractive than renting, due to the recent rent increases, if a deposit is available.
Ways we are trying to help
At Skipton, we are continuing with our focus on first time buyers this year and we are determined to make this the year of the first time buyer! We are aiming for 40% of our new lending to go to first time buyers and the long list of criteria tweaks made during 2023 has put us in a great position to help as many of these customers as possible. No matter whether they are buying from their landlord at a discount, buying with the support of the Income Booster (Joint Borrower, Sole Proprietor scheme), borrowing up to 100% LTV with the Track Record mortgage, or simply receiving a gifted deposit contribution, Skipton can help.
The input a broker can add to the experience of these clients could be invaluable. To those who have never been through the buying process before, a broker is on hand from the very beginning to explore the different options and acts as a sounding board to the needs and wants of their first time buyer clients. The access mortgage brokers have to either a panel of lenders, or the whole of market can really go a long way to ensure that the cheapest and most suitable solution is found.
This year so far
So far in 2024, the level of first time buyer activity has been strong now that they are starting to see rates come down and lower house prices. Recent trends out in the market are showing that the number of first time buyers choosing a flat as their first home is on the rise, whereas those who buy a terraced property is on the decline. As the ability to save a deposit has continued to become more challenging for some, there has been a shift towards more first time buyers joining forces to secure their purchase, approximately 63% of first time buyer transactions are joint applications. Most are now comfortable with the reality that the level of rates we are seeing is the new “normal”.
Final thoughts
A broker is there to help you by talking through your options and help first time buyers navigate what can be a daunting process. There are many possibilities for first time buyers to get onto the property ladder, from Track Record to Income Booster (JBSP) and Shared Ownership mortgages.
Knowing when the right time is to buy, is a very difficult question, which I imagine brokers and estate agents are asked daily. But, for a first time buyer, if the property is right and they can afford the mortgage payments then they’ve answered their own question!