Despite the stamp duty holiday, which offers relief on the tax until March 2021 on properties up to £500,000, it would seem concerns over financial security and practical hurdles have put a halt to many purchasing plans.
In fact, the survey of 1,000 would-be first-time buyers by mortgage lender, Aldermore, found 46% had experienced delays to their home buying plans with one in six revealing this was because the sale had fallen through due to the pandemic.
Meanwhile, one in five (20%) said they had to pull out due to the lockdown.
But concerns over financial security were also playing a major role in first-time buyers’ reluctance to move onto the property ladder, with nearly half (49%) admitting they were worried about money.
Many felt the pandemic had made it harder than before to buy a home.
Jon Cooper, head of mortgage distribution, Aldermore said explained how factors such as employment and income – which are all being impacted by the pandemic and social distancing measures – could affect first-time buyers over the next few months.
“First-time buyers experience strong financial and emotional challenges at the best of times as they go through the home buying journey, but it appears now this has been heightened by Covid-19,” he said.
“The wider economic recovery will be the real determining factor for how the first-time buyer market performs this year. First-time buyers need job security if they are to feel confident in taking the plunge in what is one of the biggest financial investments of their lives.”
Types of home
Aldermore’s survey also found 39% of potential first-time buyers were reconsidering the type of property they wanted to buy as a result of the pandemic.
In fact, four in 10 (42%) said having a garden or balcony was a top priority and a third (33%) were searching for properties near the countryside or parks.
What’s more, for those who were still keen and able to move, the stamp duty holiday had proven to be popular and something they wanted to take advantage of.
Nearly a third (31%) of prospective first-time buyers believed it would be a big help to them, rising to half (47%) of those looking to buy their first home in the next 12 months.
Stamp duty relief
A quarter (24%) said the stamp duty holiday – which ends on 31 March 2020 – had brought forward their home buying plans as they attempted to meet the deadline.
A further fifth (21%) said they would borrow money from friends and family in order to achieve their homeownership dreams ahead of the deadline.
Cooper added: “It’s important as conditions continue to change that new buyers seek expert advice from brokers who will be able to outline options and help ease the confusion of the process that many feel.
“Stamp duty relief also appears to have received a positive response from first-time buyers, with many seeing it as a welcome boost. The initial costs of getting on the ladder can be a real barrier to many, so anything that helps reduce that entry fee for some is welcome for the housing market.”
[box style=”4″]
What Mortgage has teamed up with L&C to offer you expert advice on the right mortgage deal.
Whether you’re buying a new home, remortgaging to a new deal or buying an investment property, L&C can help – and you’ll pay no fee for their advice. To find out more, click here.
[/box]
Loading ...