First-Time Buyers Back In UK Housing Market After 2020 Hiatus - Zoopla

(Alliance News) - First-time buyers are re-emerging in the UK housing market this year, after the ...

Alliance News 25 February, 2021 | 6:30AM
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(Alliance News) - First-time buyers are re-emerging in the UK housing market this year, after the impact of the coronavirus pandemic meant their plans were put on hold in 2020, property experts have said.

However, the increase could add to the upward pressure on property prices climbing higher as demand for homes outweighs supply.

Zoopla said the share of first-time buyers purchasing properties dipped to its lowest levels since 2016 last year.

Their numbers now appear to be on the increase, with a 5% increase in demand in the first six weeks of 2021 compared with towards the end of 2020.

Zoopla defined demand as people who are actively viewing and engaged in finding out more about property on its website.

The share of first-time buyers across the UK reached its lowest level since 2016 last year, accounting for 31% of sales, down from a peak of 35% in 2018, according to Zoopla's calculations.

It said sales agreed for properties priced between GBP100,000 and GBP150,000, a sector of the market where first-time buyers are typically more active, have recently increased.

Many lenders pulled their low-deposit mortgages at the start of the coronavirus pandemic amid concerns about the wider economy and possible house price falls, but in recent months they have been returning to this type of lending.

Zoopla said the return of first-time buyers to the market goes some way to explaining why the supply of homes is failing to keep pace with demand, bearing in mind first-time buyers have no home themselves to sell.

Reports emerged this week that UK Chancellor Rishi Sunak could be poised to extend the stamp duty holiday, which is due to end on March 31, by another three months until the end of June.

The stamp duty holiday has been pushing up demand in the market as buyers rush to beat the deadline.

Grainne Gilmore, head of research at Zoopla said: "The strong bounce in demand seen at the start of the year has been further boosted by increased numbers of first-time buyers active in the market.

"Many of these buyers will be taking advantage of the increased number of home loans now available for purchasers with smaller deposits.

"First-time buyers have no property to sell, so their increased activity in the market is further pushing up buyer demand ahead of supply.

"As the growth in demand continues to outstrip the supply of homes, it puts more upwards pressure on prices."

Gilmore also said one area of the market where there is more supply coming is among landlords who are bringing their investment properties forward for sale.

By Vicky Shaw, PA Personal Finance Correspondent

source: PA

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