New data shows that 17% of first-time buyers say they are already using or are planning to use the 95% mortgage guarantee scheme, with many setting their hearts on a return to city living.
Research from Rightmove has found that buyer demand in city centres and for smaller properties are on the rise. Over the past year, bigger family homes were the strongest performers in the market, but this has now shifted to flats, which saw the biggest jump in demand when comparing April with January, an uplift of 39%.
The easing of covid restrictions has increased the appeal of living in a city centre, leading to some cities seeing buyer demand jump as high as 76% in York city centre, followed by a 62% jump in Norwich and a 57% rise in Sheffield.
Looking at some of the biggest city centres across Great Britain the average jump in buyer demand in April compared to January of this year was 35%. This compares to a 32% increase in prospective buyers looking to move to a village.
Similarly, if you look at all urban locations and all rural locations across Great Britain, the growth in buyer demand for urban locations is now outperforming the growth in rural areas for the first time since before the pandemic started.
In London, the local areas further out are still seeing the biggest increases in demand, but overall the Inner London boroughs are only slightly behind the Outer London boroughs. Inner London saw a jump of 30% in buyer demand compared with January, while Outer London is up by 34%. Also, Highbury in Islington is in the top ten, with a jump of 66% compared with January. Flats in the capital have also seen a jump in demand, up by 33% and coming in second place just behind bungalows (+41%).
First-time buyer opportunity
The introduction in April of the government’s 95% mortgage guarantee scheme coupled with a virtual standstill for prices in many of these city centres has combined to help more first-time buyers get onto the property ladder.
On average across some of the biggest cities in the UK, prices are unchanged when comparing January with April, at 0%. This compares to an overall national average jump in prices of 3.4% for the same period.
A new study among over 1,000 first-time buyers has found that just under one in five (17%) are planning to use the 95% mortgage guarantee scheme or are already using it.
Just under two-thirds of first-time buyers surveyed (60%) said that they have been able to save more money towards their deposit over the past year due to the various lockdowns. Over half of them (53%) said this meant they were going to put down a bigger deposit, while over a third (37%) said it meant they could now buy sooner than they were originally planning to.
The study also found that the desire to move to a quieter location that has been a trend driving a number of local markets over the past year is not as appealing to first-time buyers.
While over a quarter of homeowners planning to move in the next 12 months cited a move to the countryside or coast as their motivation (+28%), this was just 10% for the first-time buyer group.
Tim Bannister, Rightmove’s Housing Expert, says: “These are early signs but they certainly point to some good news for city centres across Great Britain, with a number of agents now telling me they’ve seen a marked uptick in demand from first-time buyers, and they’re managing to sell city centre flats more quickly than in earlier months of the year.
"People starting to venture in to their local high streets and once again experiencing the buzz of their city centres, along with greater mortgage availability for first-time buyers, means city centres are staging a much-needed comeback in the market.
"Right now some buyers are able to grab a relative city bargain compared to the heady price growth outside cities, but these early signs of demand could be the start of city prices rising again, so for those home-hunters who have their sights set on a city-centre flat now is the time to see what’s available.”
Source:- https://www.propertyreporter.co.uk/property/ftbs-fuelling-a-demand-surge-in-city-centres.html