First-time homebuyers accounted for the biggest chunk of Britain’s property purchases in 2022, even as mortgage rates spiraled to 14-year highs and a cost-of-living squeeze strained finances.
(Bloomberg) — First-time homebuyers accounted for the biggest chunk of Britain’s property purchases in 2022, even as mortgage rates spiraled to 14-year highs and a cost-of-living squeeze strained finances.
Britons buying their first home made up an estimated 53% of all property purchases with a mortgage last year, according to research published Tuesday by the Yorkshire Building Society. That’s up from 50% in 2021 and 41% a decade ago. Still, the amount of new buyers fell 9% year-on-year, dropping to 370,287 in 2022 from a 20-year high of more than 400,000 a year earlier.
The new buyers provided demand in a year that saw house prices climb. This year their numbers are likely to drop even more, according to Nitesh Patel, an economist at Yorkshire Building Society.
“The one constant in the housing market – the lack of supply at all stages of homeownership – will remain, which will help to maintain house prices,” Patel said. “The continued uncertain landscape, however, which may prevent would-be borrowers from making such a significant purchase or cause lenders to tighten affordability, could mean we’ll see a further fall in first-time buyers next year.”
For 2022 as a whole, Nationwide Building Society said property prices finished the year 2.8% above where they were at the end of 2021.
Mortgage rates have surged in Britain since then-Prime Minister Liz Truss’s September mini-budget sent key home loan costs to highs of 6.65%. While rates have since stabilized below 6%, higher borrowing costs are threatening to trigger a decline in house prices this year.
(Updates with economist comment in the fourth paragraph, house price growth in the fifth paragraph.)
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