First-time buyers were still going strong in 2022 despite some of the most challenging housing and mortgage conditions in recent times, new analysis has revealed.
It is forecast the number of new buyers stepping on to the property ladder in 2022 will be 370,287 – which is a 5% year-on-year increase compared to pre-Covid 2019.
The analysis from Yorkshire Building Society suggest the number of first-time buyers had in fact fallen by 9% since 2021. However, this year was an anomaly because of the boom created by the stamp duty holiday introduced to bolster the economy during the pandemic.
So, whilst the number of first-time buyers was expected to be fewer overall than the previous year, those who purchased a property for the first time in 2022 were expected to represent 53% of all house purchases with a mortgage. This is up from 50% in 2021, and 41% a decade ago.
Nitesh Patel, strategic economist at Yorkshire Building Society who forecasted the figures, said the year started well for first-time buyers with a steady economic picture.
“Then came the infamous mini-Budget,” he said, “which sparked panic in the mortgage market, leading to low product availability, higher borrowing costs and a slowdown in house price growth among other things.
“Coupled with the absence of a stamp duty holiday this year, these factors may mean this latest forecast is unsurprising, but it still shows that demand from first-time buyers remains strong, even with house prices being at historic highs for much of the year and the country experiencing such political and economic uncertainty.”
In 2022 the price of a typical first-time buyer home increased by 10%, or £25,621 in cash terms, to £272,500. Prior to 2021, the last peak in first-time buyers was as far back as 2006.
First-time buyer numbers to fall
However, Patel thought the unsteady economy and mortgage restrictions could create challenges for first-time buyers as 2023 progressed.
“The one constant in the housing market – the lack of supply at all stages of homeownership – will remain, which will help to maintain house prices,” he said.
“The continued uncertain landscape however, which may prevent would-be borrowers from making such a significant purchase or cause lenders to tighten affordability, could mean we’ll see a further fall in first-time buyers next year.”
