22 May 2024 – The first-time buyer sector shows signs of incredible activity based on an analysis of conveyancing quote forms.
According to reallymoving, the leading provider of free instant quotes for home moving services, a staggering 59.7% of the market is comprised of first-time buyers, overshadowing the 25.3% of downsizers.
The data was compiled through reallymoving’s directory of accomplished conveyancing quote forms. The provider estimates approximately 9% of the UK’s home movers receive quotes from the site.
Scotland sees biggest upsizer share, South West with most downsizers
Reallymoving’s data shows Scotland has the largest share of people upsizing at 70.1% for April 2024. This was a remarkable increase from the previous month, which saw a 66.3% upsizer share. Northern Ireland also saw a significant upward shift from 50.6% to 52.3%.
Overall, upsizing trends show that regions that suffered a steep decline in upsizing numbers from previous years (e.g., East Midlands and Northern Ireland) are improving.
On the other hand, the South West had the lion’s share of people wanting to downsize, at 32.1% in April 2024. The South East followed in a close second, at 28.1% of the total conveyancing quotes for the same month.
Interestingly, both leading regions dropped from the previous month’s recorded quotes — 32.1% and 28.2%, respectively.
On a larger scale, a downward trend surfaces for downsizing activity.
Decrease in downsizing activity
Most UK regions recorded a general decline in downsizing activity in April 2024. Only Northern Ireland showed a remarkable uptick, which jumped to 35.2% from last month’s 32.0%.
The reallymoving analysis also highlighted a significant decrease in the market share of downsizing movers. The drop from 35% in September 2023 to 24% in March 2024 was the lowest for over two years.
Many attribute this slump to two factors: the easing of the cost of living crisis and the costs of downsizing. During the height of inflation, many older homeowners were forced to look for smaller properties to accommodate their later living needs and tighter budgets.
Based on the current setup, this sector can now afford the higher utility costs associated with their larger homes.
Furthermore, downsizers may also be intimidated by the costs associated with moving. Total costs hover around £14,458, including Stamp Duty, surveys, conveyancing charges, removals, and estate agent fees.
Unfortunately for upsizers, this slump in the downsizing movement can make choosing their next home extra tricky.
First-time buyer growth may finally be stimulating property market movement
Of the total conveyancing quotes for April 2024, London’s first-time buyers accounted for 69.7%. Wales followed at 63.4%, and the North West of England came in third at 61.5%. Compared to the statistics for downsizing, this overwhelming uptick in first-time buyer activity is the push the property market needs.
Movement from the lower end of the real estate market will provide the incentive upsizers need to purchase larger properties.
This, in turn, will help turn the cycle over to the people wanting to downsize, who will provide new additions to the current housing stock.
However, this current trend of buyer activity is not without its implications.
In fact, first-time buyers still face challenges getting into the property market. Without the Bank of Mum and Dad, it takes 76 months or 6.5 years for a first-time buyer on a single income to raise £25,554. This amount accounts for the required 10% deposit, conveyancing, surveying, and removal costs.
It takes even longer for those in the capital. Buyers in London need 8 years and 8 months of saving up to afford a starter home.
Our Opinion
Depsite rising prices, and a seemingly busy market, not all is well. There are signs of worrying trends. Although first-time buyers dominate the market at the moment, affordability is still challenging, with young people having to save up for years for a deposit if they don’t have help from family.
And as prices keep rising, the situation won’t get better any time soon, even if mortgage rates come down again.
The other worrying trend is the decrease in people downsizing. This has been going on for a while, but it keeps getting worse. Reserach has shown that many over 55s refrain from downsizing due to costs and the lack of appropriate homes.
As they stay put, people wanting to upsize are stuck too, because they have nowhere to move to. And this will impact on first-time buyers. When demand outstrips demand, prices go up, which means affordability suffers.
The property market is a fine-tuned machine, so if one part breaks, it can’t function properly. And signs aren’t good. For now, the market is pushing on, with first-time buyers doing the heavy lifting. Driven by high rents, they seek to reach the more or less safe haven of the property ladder.
But unless all buyer groups – first-timers, downsizers and upsizers – are in it, the market will eventually struggle.
