Introduction to the issues a first time buyer faces
For many years now we have seen in the news that it is pretty bleak to be a first time buyer. This is attributed to the fact that house prices are rising at an extortionate rate. Whilst this does make it harder for first time buyers to buy their first home because whilst house prices are rising wages are stagnating, there is some hope for first time buyers.
According to a study conducted by Halifax the rate of first time buyers increased by 35% in 2021. This is quite a turn around from the -13% drop we saw in 2020. The smallest increase in first time buyers was in Scotland but this was still at a rate of 24%. The highest being Greater London at 49%.
Why is it so Difficult for a First Time Buyer?
One of the main causes of this increase will be because of the freeze on stamp duty. This freeze encouraged many first time buyers to get on the property ladder so that they wouldn’t have to pay. This would in the long run save them money and it’s clear that the government’s policy worked.
Another factor that we have to take into account is the “race for space”. The cause of this was due to the fact that people now want larger homes with a good sized garden. This has come because there has been a bit of a cultural shift in the past few years. Since the pandemic we have seen countless people working from home which has since appealed to companies. In many companies’ view they can move to a more work at home approach. This would then save up on needing so much office space and ultimately save them money.
However, with people working from home this requires people to need their own space so that they can work efficiently. This explains why people are looking for larger houses so that they can use an area of it as a home office. In terms of gardens in recent years we have seen an increase in people hosting parties or small gatherings in their garden’s, especially during summer. This along with the rise in popularity of decking, DIY bars, and garden furniture explains why people are more interested in their gardens now as it is now a social space and a place to host parties.
Finally, there is one more factor that we should look into that may explain why there has been an increase in first time buyers. Over the past few years, we have seen the government introduce new schemes aimed at helping first time buyers. Some of these include the first home buyers’ scheme and the help to buy equity loan. To read more about these schemes click here. There is no doubt that these schemes will have made it easier for first time buyers to buy their own property. This along with the freeze in stamp duty will have helped even more.
In conclusion, whilst there are still difficulties for first time buyers, such as stagnation of wages. There are also schemes available to help first time buyers and as the study has shown there has been an increase in first time buyers. However, there is still a way to go as the average age of a first time buyer is 30+. This along with the continuing rise in house prices will make it more difficult.
To read more about first time buyers and housing click here
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