FIRST-TIME BUYERS TOPS 300,000 IN 2020, DESPITE THE IMPACT OF COVID-19

The number of first-time buyers topped the 300,000-mark for the sixth time in the past seven years in 2020, despite the pandemic restrictions and economic downturn, Yorkshire Building Society has estimated.

A total of 300,307 first-time buyer mortgages completed in 2020, a year-on-year fall of 14.5%, but remaining higher than in any year during the financial crisis.

The data also shows first-time buyers made up 50% of mortgage approvals, a similar proportion to 2019.

Covid-19 impacted the mortgage and housing markets throughout the year, causing physical valuations to be paused for two months in spring and earnings to fall. House prices rose after the Chancellor put in place a nine-month Stamp Duty holiday which is due to end on 31 March 2021.

The Society has based its analysis on market-wide first-time buyer data to November 2020, with  December being estimated by the Society.*

Nitesh Patel, Strategic Economist at Yorkshire Building Society, said: 

Given the significant challenges of 2020, it’s not surprising the number of first-time buyers has fallen. It is however  encouraging that more than 300,000 mortgages were completed enabling people to buy their first home, despite the restricted availability of low deposit mortgages, rising house prices and the economic impact of Covid-19, which has particularly affected younger consumer groups.

The overall housing and mortgage market has been remarkably resilient in 2020, partly thanks to the temporary Stamp Duty cut, which has benefitted owner occupiers. Higher levels of disposable income for those who shifted to working from home and a strengthened desire for homeownership amongst prospective first-time buyers will also have helped.

Over the next year, two factors are likely to impact first-time buyers. Firstly, the current Help-to-Buy scheme comes to an end in March, and the follow-on scheme is more restrictive in terms of regional house price caps. And secondly, the expected rise in unemployment is likely to weigh heavily on the young, with younger workers already bearing the brunt of falls in income throughout the pandemic.

Table showing number of first-time buyers between 2007-2020

Year

Number of first-time buyers

Year-on-year change

Share of all mortgage house purchases

2007

357,590

-11.0%

36%

2008

191,040

-47.0%

38%

2009

193,940

2.0%

40%

2010

193,590

0%

38%

2011

187,990

-3%

40%

2012

211,920

13%

43%

2013

258,700

22%

46%

2014

300,370

16%

48%

2015

297,520

-1%

47%

2016

329,000

11%

51%

2017

345,920

5%

51%

2018

353,130

2%

51%

2019

351,260

-0.5%

51%

2020*

300,307

-14.5%

50%

 

* Based on UK Finance data to November 2020, with December 2020 estimated by Yorkshire Building Society, in line with previous first-time buyer patterns. Actual data due to be available in February 2021.

 

All information correct at time of publication.

W08-21

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