A 20-year peak in the number of first-time buyers highlights the need to continue delivering attainable new homes in London and the South East, according to Bellway Thames Gateway.
Analysis by Yorkshire Building Society estimates that 408,379 people in the UK purchased their first home in 2021 – a 35 per cent increase on the year before and the highest figure since 2002.
Falling unemployment, low borrowing costs, more low deposit mortgage deals, and lockdown savings have all been suggested as factors driving this increased demand.
However, Emma Hamlett, Sales Director at Bellway Thames Gateway, says the rise in first-time buyers is also a sign of the underlying strength of the housing market, particularly in London and the South East.
She said: “While it is undoubtedly true that short-term factors such as the stamp duty holiday provided a welcome boost to the housing market in certain parts of the country in 2021, the strong demand from first-time buyers looking for homes in and around the capital is very much a long-term trend.
“More than half of the buyers at our developments over the past three years have been first-time purchasers and we fully expect this to continue. Sales have remained at a high level since the end of the stamp duty holiday last year, and as a division we are currently selling an average of 12 homes per week.
“Many of our top-performing sites are those with a significant proportion of smaller homes which are suitable for first-time buyers. Apartments at our sites in Beckton and Sydenham are selling extremely well, while the mix of houses and apartments at St George’s Park in Hornchurch is proving particularly popular with those taking their first steps on the housing ladder.”
Nitesh Patel, Strategic Economist at Yorkshire Building Society, described the performance of the first-time buyer market in 2021 as “extraordinary” when set against the backdrop of uncertainty caused by the lockdown at the start of the year.
He said the phased re-opening of the economy in April, in addition to low borrowing costs and the strengthening jobs market, had all been factors driving the increase in demand.
The Yorkshire Building Society report also revealed that the proportion of households’ disposable income saved nationally rose from seven per cent in 2019 to 27 per cent in the second of quarter of 2020 following the first lockdown – something which may have enabled more people to put down a deposit on a home.
Emma said: “Lockdown savings and the stamp duty holiday may well have enabled some people to get onto the property ladder sooner than they had anticipated. However, first-time buyers continue to be exempt from stamp duty on the first £300,000 of a property they purchase, and in London – unlike in other parts of the country – they can still use Help to Buy on homes priced up to £600,000.
“Value for money, convenience and location continue to be the key considerations for first-time buyers in and around the capital. This is why Bellway is committed to delivering modern high-quality homes in well-connected commuter locations which are attainable for those stepping onto the property ladder for the first time.”
