Current homeowners are more likely to buy than FTB’s in current market.
Property portal, Zoopla, recently conducted research that predicts current homeowners looking to move are becoming more likely to buy a house in the current climate than First-Time Buyers (FTBs).
For over a year, the highest proportion of property sales across the country were people buying for the first time. However, the squeeze on mortgage lending and increased interest from movers (especially with the new Stamp Duty thresholds) looks likely to reverse this trend this year and into next.
The Coronavirus lockdown encouraged many to reconsidering their domestic arrangements, particularly as they have spent more time working from home.
As families were confined to their properties, gardens and open spaces as well as a closer proximity to family has become a priority. The realisation that we may be living with this (or strains of) this virus for some time has led some existing homeowners to look around for an alternative property.
As mortgage lenders begin to ask for larger deposits, due to the threat of a borrower not being able to pay back their loan, FTBs options are being squeezed. With the end of the Job Retention Scheme, many potential FTBs may also face the uncertainty of employment, creating a greater risk for lenders.
The result, according to Zoopla, is that home movers will become the more likely buyers at the end of this year and next year.
Speaking to many Estate Agents, pent-up demand, and government incentives such as a stamp duty holiday, has led to a surge in interest when lockdown restrictions were lifted.
Zoopla’s research suggested demand from first-time buyers was already dropping following the post-lockdown peak, whereas demand from movers was "holding steady" at 37% higher than pre-Covid levels.
"First-time buyers have been a driving force of housing sales over the last decade," said Richard Donnell, research and insight director at Zoopla.
"They remain a key buyer group but lower availability of higher loan to value mortgages and increased movement by existing homeowners means a shift in the mix of home buyers into 2021."