According to recent research commissioned by HSBC UK, first-time buyers are gaining confidence in their quest to find a property, with many believing that the dream of holding the keys to their own home is within closer reach than it was just a few months ago.
A Surge in Buyer Confidence
The study indicates a significant shift in sentiment among those aspiring to purchase their first home within the coming year. Approximately 68% of these individuals have reported a boost in confidence compared to their outlook at the beginning of 2023. This positive change is a reflection of the underlying resilience of the housing market, despite the economic hurdles encountered in the first half of the year.
Seeking Value for Money
In an effort to manage initial expenses, nearly three-quarters (73%) of prospective buyers are considering properties that require some level of renovation. This trend highlights a pragmatic approach to home buying, with individuals looking to balance the cost of immediate housing needs against the potential for future value creation through improvements and repairs.
Insights from HSBC UK’s Mortgage Head
Andrew Matson, who leads the mortgage sector at HSBC UK, acknowledges the encouraging trend among first-time buyers. He notes the bank’s commitment to supporting customers amid economic fluctuations, citing the Mortgage Charter’s role in providing guidance. Matson emphasizes the usefulness of HSBC UK’s online resources tailored for first-time buyers, urging them to take advantage of the tools available to navigate the housing market more effectively.
The Driving Factors for Purchasing a Home
The motives for entering the property market vary, with some first-time buyers looking to escape the rent cycle, which 21% believe is more expensive than owning a home. Others seek independence (20%), financial security (17%), and the desire to provide for their families (14%). Notably, only 11% view their first home primarily as an investment.
Regional differences also emerge in the research, with personal independence being a significant motivator in major cities such as London, Manchester, and Newcastle. In contrast, Liverpool residents cite financial security as their main reason for buying.
Regional Confidence in Affording a Mortgage Deposit
Confidence levels in securing a mortgage deposit fluctuate across the UK. Wales and Yorkshire and the Humber show the highest confidence, with 64% and 63% respectively, feeling positive about their ability to gather the necessary funds now or within a year. On the other end of the spectrum, those in the East Midlands, the North East, and Northern Ireland are less confident, with only about half feeling optimistic about affording a deposit.
How Buyers Are Saving and Seeking Mortgage Information
When it comes to saving for a deposit, the majority (68%) prefer using a traditional savings account, while around a quarter (24%) opt for an ISA.
Potential buyers primarily turn to brokers or financial advisers for mortgage information, but many also utilize the websites of mortgage providers, comparison sites, and money-saving websites. Input from friends and family still plays a role but is less influential.
Key Considerations in Choosing a Mortgage Provider
Cost remains a critical factor when selecting a mortgage provider, with 32% of respondents prioritizing the most cost-effective options. Recommendations from brokers or advisers, and choosing trusted brands, also weigh heavily in the decision-making process. Some buyers value the convenience of consolidating their finances by staying with their current providers, while personal recommendations have a modest impact.
In summary, the UK housing market is witnessing an upward trend in optimism among first-time homebuyers. With a strategic approach to managing costs, seeking expert advice, and leveraging financial products tailored to their needs, these buyers are increasingly confident about stepping onto the property ladder.