Market Stalls As First-Time Buyer Sales Fall
Just before the new year, Haart – the UK’s largest independent lettings and estate agent – released data related to the final quarter of 2018 – and the news isn’t great for the property industry.
When the government cut stamp duty for first-time buyers in 2017, the government assumed that this would spur an influx of new homeowners into the market – hopefully slowing the increase in sold house prices to make them more affordable to the less wealthy. This move re-affirmed the decision made by George Osborne earlier in the year to increase stamp duty on those who owned second homes – especially landlords.
Unfortunately, Osborne’s stamp duty hike simply generated more money for the government at the expense of rental tenants, who bore the brunt of the policy change as landlords passed on the extra costs.
Back to the present day, the new data has shown that the number of first-time buyers dropped by 8.4% during November 2018 – the largest drop since the same time the previous year. While November and December tend to be quieter than the rest of the year as the public refocus their efforts towards Christmas and New Year, this significant drop appears to have a number of experts within the industry worried.
With the upcoming Brexit deadline, many within the industry believe that the ‘disillusioned youth’ of today are waiting until the future is clearer before pulling the trigger on such a major purchase – mainly in an effort to avoid the risk of negative equity. However, others believe that it is simply the case that younger generations have less disposable income than anytime previously, with many young people pinning their hopes on a lottery win to find a way out of the rental trap.
“Sales to first-time buyers dropped off on the month in November by the most significant amount since the government’s stamp duty cut a year ago. But with our latest data indicating that the average first-time buyer deposit has decreased by a very significant 20% annually,” said Paul Smith, CEO of Haart.
“I would urge first-time buyers to brush off the ongoing uncertainty and act now before prices start to climb back up again in the New Year.”
The general consensus amongst the young is that the prevalence of opportunities for buying a home without help from the Bank of Mum and Dad is slowing down, and thanks to rising housing values – there seems little hope in sight for the future.
So where does this leave vendors in starter homes who wish to sell their house fast? Sadly, the lack of new buyers means that listed properties are likely to spend much longer on the market than they have done in the past. Among the majority of older owners, there is little demand for starter homes as these are often too small, but luckily, those in starter homes who need to sell can contract National Homebuyers, who are always willing to provide a competitive quote for any house, regardless of market conditions.
Worried that you won’t find any buyers? Why not ask National Homebuyers for advice, as we buy any house. Call 08000 443 911 or request a call back to find out how much you could get for your property.