Covid-19 and First Time Buyers
Since 31st December 2019, coronavirus has impacted life as we knew it. China reported a cluster of cases of pneumonia, and eventually, coronavirus was the identified cause. Within three months, covid-19 had caused a worldwide pandemic, with the UK seeing its first of many lockdowns throughout the country. The country closed down for an initial three months in March 2020, and a year later, the country was in another lockdown. The pandemic has had an impact on a lot of different industries, with the property industry being one of the many. Lenders have been requesting higher mortgage deposits and viewing homes was virtually impossible.
As of March 2021, the market has shifted, and the property industry has recovered in great fashion. However, the question now is, how has covid-19 affected first-time buyers? Cairds Estate Agents investigates how first-time buyers have been impacted, and what the future may hold for those hoping to buy their first home.
Covid-19 and House Prices
The property market is open, which means that estate agents such as Cairds Estate Agents are now conducting in-person property viewing, and property buyers alike are able to home. The UK property marketing has been on the rise since July 2020, which is has been fuelled by the stamp duty temporary cut by the government.
So how has coronavirus affected house prices? The Land Registry states the average price of a property in the UK increased by 7.5% year-on-year in January, to reach £249,309. For first-time buyers this can seem daunting, however with the temporary cut in stamp duty, you can save up to £15,000 in tax if you move before the deadline. The tax has been suspended on the first £50k of all property sales in England and Northern Ireland, which has been extended to 30th June 2021.
The Property Market and First-Time Buyers
In 2020, when coronavirus sent the UK into closure, a study was conducted that found that 76% of first-time buyers felt worried, confused, and angry at how coronavirus had affected first-time buyers within the property market. Within this study 65% of first-time buyers said it was impossible to get onto the property ladder; with 44% of participants left feeling confused by the changing deposit requirements and lender criteria.
First-time buyers face some major obstacles due to the pandemic:
- Larger deposits required from lenders.
- Savings for a deposit – more than half of renters between the ages of 25 and 30 do not have any savings.
- Job stability is a critical element of owning a home. The pandemic has increased job losses over the last two years.
The Future for First-Time Buyers
The pandemic has impacted people in many different ways, but for prospective first-time buyers, it is now understood how important owning a home is. Owning a home is an aspiration that the pandemic has highlighted for many and saving for a home is now at the forefront of prospect first-time buyers’ minds. Cairds Estate Agents are here to help with all questions about the property market for your first home. Contact us today for more information.