Breaking news: UK witnesses a substantial 20% decline in first-time buyers as mortgage costs surge



The UK witnesses a substantial 20% decline in first-time buyers as mortgage costs surge. Find out more about the challenges people are facing and the impact on the housing market.

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The number of first-time homebuyers in the UK has seen a concerning decline of over 20%, highlighting the challenges people are facing due to rising mortgage costs. According to mortgage lender Halifax, there were 22% fewer first-time buyers between January and August this year compared to the same period in 2020. Despite the decrease in numbers, first-time buyers still accounted for more than half (53%) of all home loans granted in the first eight months of the year, similar to the previous year's figure of 52%.


Breaking news: UK witnesses a substantial 20% decline in first-time buyers as mortgage costs surge | ogusyis.com

A recent report by property website Rightmove sheds light on the preferences of buyers in the market. It highlights that properties in need of renovation, often referred to as "fixer uppers," are in high demand. These homes are on average 8% cheaper than the overall average property price, amounting to £29,000 in savings. On the opposite end of the spectrum, buyers looking for newly refurbished homes are paying a premium of 19%, or nearly £70,000. After renovation projects, properties with new boilers, double glazing, loft conversions, and ample storage space attract the most attention. Additionally, chain-free homes with gardens and those located near stations are also highly sought after.

For renters, the top three features that garner the most demand are double glazing, smart technology, and proximity to a station. These amenities seem to resonate with individuals looking for comfortable, convenient, and energy-efficient living arrangements.

The Bank of England's relentless pursuit of controlling high inflation has seen interest rates rise 14 times since the end of 2021, reaching 5.25%. The central bank's recent decision to pause rate increases has raised hopes that the peak in borrowing costs has been reached. The impact of rising mortgage costs is evident in the south-east of the UK, which has the second most expensive average property prices nationwide. In this region, the number of first-time buyers has seen the most significant decline this year, down by 25%. Following closely behind are London and East Anglia, both experiencing a decline of 24%, as reported by Halifax.

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Despite the challenges, there is some positive news for first-time buyers. Strong income growth in recent months has resulted in a decrease in the house price to income ratio, falling from 5.8 in June last year to 5.1. This means that purchasing a home has become more affordable for those looking to get onto the property ladder compared to June 2020. The average deposit for a first home currently stands at £54,116, equivalent to 19% of the property price. This is in contrast to 2013 when the average deposit was £31,060, representing 21% of the property purchase price. Unsurprisingly, first-time buyers in London face the highest deposit requirement, an average of £113,078, while those in the north-east of the UK put down the lowest amount, averaging £29,184.

In conclusion, the UK housing market is witnessing a decline in the number of first-time buyers attributed to the challenges posed by rising mortgage costs. However, there is an evident preference for properties in need of renovation, which are more affordable compared to average listings. Despite the tough market conditions, improvements in income growth have made it slightly easier for first-time buyers to enter the market. Nonetheless, the south-east, London, and East Anglia have seen the sharpest declines in first-time buyers. As the housing market continues to evolve, it will be essential for potential buyers to carefully consider their options and seek opportunities that align with their financial capabilities and preferences.

Breaking news: UK witnesses a substantial 20% decline in first-time buyers as mortgage costs surge

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