FIRST-TIME BUYERS STEPPING IN TO REPLACE SECOND-HOMERS

They say it’s an ill wind which blows nobody any good, and the slowdown in the second homes market brought about by the increase in council tax on such properties has led to an influx of first-time buyers coming into the market in Norfolk’s north coast area, lured by greater affordability, a wider choice of homes available, and falling mortgage rates, writes Sue Hall.

This is good news, both because first-time buyers are a vital ingredient in keeping the housing market moving, and because most communities would prefer local homes to be occupied by full-time residents.

Whereas in recent years first-time buyers looking at a limited supply may have felt pressurised into buying a home which wasn’t completely right for them, now there is much more choice, so they can take the time to get it right without feeling that by doing so they will lose out.  This factor is definitely bringing more of them into the market.

Affordability and certainty are two important factors, too.  Steadily reducing interest rates have resulted in a stream of new, lower-cost mortgage products becoming available.  And with most first-time buyers locking into a fixed rate for five years, they will know what their home will cost for the foreseeable future as well – something which many renters cannot say.

As a result, we are seeing more first-time buyers in their late 20s, younger than the national average of 33.  At this age, they are happy to take on longer-term mortgages, with 30 years increasingly becoming the standard.  This means a lower monthly cost, helping to making buying an affordable option. 

And with 95% loan-to-value mortgages also back on the market, saving for a deposit – now typically between £12,500 and £15,000 on a first home – is less onerous than it once was.

With a longer-term confidence driven by fixed mortgage costs comes the ability to consider a home which will be more future-proof as well.  We are seeing first-time buyers often opting for houses with at least two bedrooms rather than one-bed flats, perhaps with one eye on this being the home in which they start a family.  This is good news again for local communities, especially those where schools are struggling to fill their rolls.

No-one can claim that the market is booming at the moment.  But as more first-time buyers come forward, we will see a more sustainable market building for the longer-term – and that is good for everybody.