What has been the quietest group in the housing market, will now be its biggest driving force spanning over the next five years.
This comes despite the massive housing price gap, which is the biggest its ever been between London and the rest of the UK.
The sales per year of these first-time buyers are set to rise five per cent by 2025, showing an increase from 43,000 property sales to 47,000.
This also comes as wages are set to grow by 15 per cent, leaving Londoners with plenty of extra change to get on the property ladder.
Popular estate agent, Savills predicts that first-time buyers by 2025 will actually account for almost half of all property sales in London.
This comes even though the Government’s Help to Buy shared equity loan scheme will come to a close.
“Transactions will take a brief hit in early 2023 as Help to Buy meets its end. However, we expect easier housing affordability to make up that shortfall by the end of the year and continued growth in first-time buyer numbers through 2024.”
And according to Savills’ annual housing market report, property values and prices are predicted to climb a total of 20.5% over the next five years.
This means that the luxury market and premium dwellings will see a surge and take centre stage.
“The recovery in the luxury markets has been sparked in prime central London when the city’s most expensive properties start to look good value on a world stage – Lucian Cook, head of residential research at Savills
But because of Brexit, it is visible to see that uncertainty is still holding back many developers from continuing with their land development plans.
This has lead to a decrease in the number of new homes being built in London and the ones scheduled to in the new year.
What will replace Help to Buy?
Knight Franks’ Patrick Gower believes that is probably in the best interest of the Government, buyers and developers to replace the Help to Buy scheme with an appealing alternative when the scheme ends in 2023.
A developer told the Evening Standard that the Government “tasked the House Builders Federation with identifying an alternative”.
And the idea of “top-up mortgages” had arisen.
It’s an option that’s currently being discussed that would see the private sector adopt the role of a lender. However, the source also noted that this would likely to be more expensive.
It had even been hinted that the Conservative Party, should they win the December election plan on extending stamp study relief from £300,000 to 500,000 for first-time buyers.
Boost expected for the 2020-21 property market
Predictions have been made for next year’s housing market.
Statistics show that house prices will rise at an expected 25% over the next six years. Other expectations are:
- Wages are set to increase by 15 per cent, which means people in England will have more money to invest
- The market will see a surge of first-time buyers as renters begin to turn away from the private rental sector
- Land with planning permission is set to become more valuable as even Governments look to acquire more
- More flats will be converted into houses as people look to become homeowners
- Developers looking to create their own Help to Buy schemes
Despite the uncertainty surrounding Brexit and more investments from overseas, the property market in 2020 looks strong and lucrative as we expect to see a huge surge of first-time buyers emerge in line with income growth, and lucrative opportunities rise up for landowners and developers, which means there’s no better time to develop or invest.
Hunter Finance can use their expertise in the property field, call on a number of resources and ensure you don’t waste time on lenders who are unlikely to back you. We may be able to offer you a good deal on your finance and there are no brokers fees as we lend our own money.