Half of all first-time buyers who started the process of purchasing a property saw it fail, despite a rise in the numbers of this group who say they have been more motivated than ever to buy a home since the onset of the pandemic and successive lockdowns.
According to the latest research by Aldermore Bank, 50pc of those whose property purchases fell through stated it was due to lockdown. The average cost to an FTB of a failed purchase was £2,912, resulting in a total loss of more than £406m in the twelve months between April 2020 and March 2021. This sector of the buying public also said they had needed to postpone their plans to buy a home by an average of 8.4 months due to the pandemic.
Lockdown and social distancing measures led to delays and resulted in spiralling costs in every part of the home purchasing process. FTBs say the heaviest expenses included the solicitor’s fees (£1,229), mortgage fees (£1,086) and conveyancing/valuation fees (£1,020). Associated costs included additional rent paid caused by delays in moving into the new property £989), estate agent fees (£988) and removal fees (£910).
Altogether, FTBs who bought in the period from April 2020 to March 2021 say they experienced a delay of two months on average and incurred £5,870 in extra costs because of Covid-19. Around 70pc say they spent more money than intended on their house puchase, with the additional costs setting them back by a total of £1.67bn.
Desire for gardens and open space
Potential FTBs are resolute in their wish to realise their home buying goals, despite delays and setbacks, with 85pc saying owning a home is a very important life ambition. Although 63pc are motivated to buy, the type of home they seek to buy has changed radically since the start of the pandemic with 67pc saying they are reconsidering the kind of property they now wish to purchase.
Outdoor space is at a premium, with 66pc making a garden or balcony a priority and 63pc wanting to live near parks or the countryside. In addition, 62pc say being near loved ones is an important consideration. And as working patterns look likely to move permanently towards flexible and remote working even after ‘freedom day’, home office space for 63pc and good wi-fi connectivity for 67pc will become prime requirements.
House purchase still popular among FTBs
Jon Cooper, Head of Mortgage Distribution at Aldermore Bank, says while the pandemic has motivated many people to purchase their first home, apart from raising a deposit, it is worthwhile to identify and factor-in as many additional costs as possible, such as the solicitor, valuation and estate agent fees, as well as removal costs, which can all mount up.
Seeking advice from a broker or financial adviser, he says, will assist greatly in making the process less confusing. Although buying a house poses its own challenges, the outcome can be most rewarding, as is illustrated by the high number of FTBs, 84pc, who said the stress had been worth it and becoming a home owner had been hugely gratifying.
Successive lockdowns over the past year, he adds, have made people re-evaluate their lives and what they need and want from their homes. A house is no longer just a place in which to live, but also a place of work, somewhere to exercise, home-school their children and socialise. Consequently, the data show a dramatic turnaround in the preferences for the type of properties today’s buyers are seeking.
Meanwhile, new data show that FTBs are driving a demand surge in city centres. 17pc say they are already using or plan to use the 95pc mortgage guarantee scheme, as many set their hearts on returning to city living. Research from Rightmove has found that buyer demand for smaller properties in city centres is on the rise.
Over the past year, larger family homes were in greatest demand, but this has now changed to flats which saw the highest jump in demand, an uplift of 39pc between January and April.