Key points –

1. First-time buyers are increasingly choosing smaller properties, like two-bedroom terraces, to afford their first home.
2. Uncertainty in mortgage rates and fluctuating house prices are the main obstacles for these aspiring homeowners.
3. In London, financial assistance from parents is crucial for many first-time buyers to secure a property.
4. Buyers are exploring various financing strategies, including affordable home ownership schemes, extending mortgage terms, and moving to less expensive neighborhoods.
5. The survey indicates that with expected falls in interest rates by 2024, homeownership may become more attainable for a wider range of buyers.

First-time buyers are making a significant shift in their home-buying strategies. Faced with various financial challenges, these aspiring homeowners are increasingly setting their sights on smaller properties. This trend is a smart move for those eager to plant their roots in the real estate market.

Survey Reveals New Preferences

According to a recent survey conducted by e.surv, involving 500 practicing valuers and surveyors, there’s a clear trend towards more compact living spaces. This shift is largely driven by the need to overcome the hurdles of high mortgage rates and fluctuating house prices, which remain major concerns for those dreaming of owning their first home.

Key Concerns:

• Mortgage Rates: 31% of surveyors pointed out that the uncertainty surrounding mortgage rates is a significant barrier.
• House Prices: 29% believe that the unpredictability of house prices is a considerable obstacle for first-time buyers.

The Appeal of Smaller Homes

Amidst these challenges, first-time buyers are now gravitating towards smaller, more manageable properties. Two-bedroom resale terraces, in particular, have become the most popular choice. This preference underscores a desire to find a sweet spot between affordability and the need for adequate living space.

London’s Unique Scenario

In London, the scenario is slightly different. Here, 22% of respondents noted that financial assistance from parents, often humorously referred to as the “Bank of Mum and Dad”, is crucial for securing a property. This assistance is a testament to the particularly high property prices in the capital.

Exploring Financing Options

First-time buyers aren’t just changing their property preferences; they’re also looking into various financing methods to enhance their purchasing power:

• Affordable Home Ownership Schemes: 18% are considering these as a viable option.
• Extended Mortgage Terms: 16% are willing to stretch their mortgage terms to make payments more manageable.
• Less Expensive Neighborhoods: Another 16% are open to buying in more affordable areas.

These strategies highlight the proactive steps being taken to overcome the barriers to homeownership.

Expert Insights

Rob Owens, the head of research at e.surv, commented on the findings. He noted that with projected falls in interest rates for home purchases by 2024, the dream of homeownership could become more achievable for many. Owens praised the resilience and adaptability of first-time buyers, who are actively seeking solutions to navigate the current market challenges.