First time buyers will ‘return to market during 2024’

This year is set to see a surge in the number of first time buyers (FTBs) entering the market as mortgage interest rates begin to reduce and both affordability, and a more flexible approach to choosing houses, persuades many to get on the property ladder.

Zoopla says this is helped by the FTB ‘discount’ which, its research shows, is £20,300 (8%) below the local market averages nationally.

This saving figure rises to £137,800 (26%) in London, the portal says.

Biggest savings

The biggest savings for FTBs are in the South West, where the typical discount in Truro, Cornwall and Dorchester, Dorset is 39%.

Hikes in mortgage rates last year mean that the average FTB is paying bills that are 27% – or £213 pcm – higher than in Q4 2022.

Izabella Lubowiecka (main image), Senior Property Researcher at Zoopla (main picture), says: “We expect more first-time buyers to come to market in 2024, particularly in the second half of the year thanks to a combination of reduced mortgage rates, earnings growth and improved affordability.

“But the reality is that many would-be buyers might be able to get on the ladder now by considering different property types or alternative locations that offer better value for money.”

Upsizing

Traditionally, many FTBs looked for a smaller home to get on the property ladder with a view to upsizing.

This has been the case in London, where 66% of FTBs are enquiring about flats, up from 63% a year ago. Similarly, Scottish FTBs are also now more interested in flats compared to 2022.

Zoopla based its figures on mortgage terms of 30 years as well as mortgage rates of 2.96% in 2022 and 4.98% in 2023.

Read more about the FTB ‘rebound’.