The first-time buyer market will reach £73.1 billion by 2024, underscoring its value to the UK economy, according to a Coventry report for intermediaries.
The report, titled The First Time Buyer Economy, projects that FTB mortgages alone are expected to reach £69.2bn in two years, 15% above pre-pandemic levels in 2019.
These borrowers are also expected to spend an average of £3.9bn a year on additional costs associated with buying a home, such as appraisals, mortgage fees and redecorating by 2024, up 5, 4% compared to this year.
The average FTB currently spends £3,100 on additional up-front costs such as removal costs and legal fees as well as survey, appraisal and mortgage costs.
Each year, FTBs also spend around £6,630, or £1.6 billion collectively, to renovate and redecorate their homes within 12 months of moving in. The combined total that the FTB typically spend on top of their mortgage is £9,780.
The survey, conducted jointly with the Center for Economics and Business Research, also reveals that in the four years to January 2022, FTBs accounted for an average of three in ten property transactions in the UK. At their highest, in October 2021, they represented 38% of transactions.
The vast majority of these new buyers are advised, with broker values particularly high among younger buyers under 45.
He adds, “Brokers play a crucial role in providing a helping hand, offering advice and insurance on the home buying process, the products and the true costs of ownership. Our survey showed that an overwhelming majority (82%) of ETFs used a broker, and three-quarters found their broker’s advice to be either somewhat (29%) or very (44%) important. »
The report adds: “FTBs play a crucial role in the housing market and the wider economy, and brokers play a vital role in supporting them. Representing almost a third of purchases and sometimes more, it is difficult to overstate the importance of the FTB market.
“At the same time, it’s hard to ignore the challenges they currently face, which in some ways are unprecedented in recent decades. Rising interest rates, rising costs of living and widespread uncertainty make buying a daunting prospect.
Coventry for Intermediaries, Head of Intermediary Relations, Jonathan Stinton, says: “With the FTB economy set to grow to £73.1 billion over the next two years and FTB mortgages averaging three property transactions over ten, there is a clear need for guidance and education. , and this represents an unmissable business opportunity for brokers.
“By supporting FTBs before, during and after buying a home, brokers are truly demonstrating their value to new borrowers.
“Educating new buyers on the need to budget for additional costs and to go above and beyond to provide quality service when there is a clear need can create lifelong relationships with new customers, helping to secure repeat business and word of mouth recommendations.”
Coventry for Intermediates said its survey queried more than 1,000 recent FTBs.