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Home Buying Statistics 2022: Percentage of First Time Buyers Decrease

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We took a look at our internal client data throughout 2022 to see how home buying patterns changed during the year after recovering from the impacts of Covid-19.

Key Home Buying Statistics 2022

  • 68% of Bird & Co’s clients were first time buyers.
  • Just under 1 in 3 clients were buying their second property.
  • 32% of enquiring buyers already owned property.
  • 76% of people buying were intending to use the property as their main residence, compared to 42% in 2021.
  • People buying property for the use of holiday lets, HMO and letting overall decreased compared to 2021.
  • Number of people buying for business purposes has more than doubled, from 15% in 2021 to 33% in 2022.

The Landscape for Home Buying in 2022

2022 was a year full of challenges for the real estate market, especially for first time buyers. Unforeseen circumstances have had a knock-on effect on the housing market, including the war in Ukraine, the lurking aftermath of Covid-19, and Liz Truss in her short-lived term in office as Prime Minister.

The Russian invasion of Ukraine in February 2022 had a huge global impact, intensifying competition for energy, causing energy prices to soar, and ultimately putting a squeeze on people’s everyday finances. As taking financial leaps became increasingly risky throughout the year, less people were taking the plunge into investing in property.

In the uncertain times of 2022, it seemed far less likely for people to make it on to the property ladder, despite potentially being ready with enough deposit to buy. The prospect of rising inflation and rising interest rates had a huge negative impact on the market, as cheap mortgage deals became obsolete, which will also carry on into 2023.

In 2020 and 2021, the COVID-19 crisis and Brexit also led to major issues for construction, as well as tenant payment defaults and mandatory closure of retail spaces. In 2022, the war has also created delays in the supply of construction materials such as steel. Consequently, projects have been delayed, costs of materials have risen, and inflation has taken off, meaning some plans to build have halted completely.

The real impact of the Russian war won’t be fully known or seen yet, but it seems unlikely the situation will change anytime soon. Many issues faced in 2022 will likely carry on into 2023.

Second-Time Buyer Statistics 2022

Those investing in another property increased from 29% in 2021 to 32% in 2022, whereas there was a dip in first time buyers from 71% in 2021 to 68% in 2022. More specifically, our statistics show that:

  • 76% of people buying were intending to use the property as their main residence, compared to 42% in 2021.
  • Over 32% of enquiring buyers throughout 2022 already own another residential property.
  • Nearly 15% of 2022 buyers had a partner who already owned another property.
  • Nearly 4% of people were related to the seller in 2022 compared to 2.6% in 2021.

Over 23% of enquiring buyers throughout 2022 were not buying the property as their main residence. Other uses for the property included:

  • 17% of enquiring buyers’ homes were purchased for letting.
  • 1% of enquiring buyers’ homes were purchased as HMOs.
  • 1% of enquiring buyers’ homes were purchased as holiday lets.

In general, across the year, just under 1 in 3 of Bird and Co’s clients were second-time buyers, whether this be for rentals or holiday homes. So, within the Bird and Co. demographic, that’s 1/3 of properties being taken off the market as rentals or second homes.

Buying Property for Business Purposes

Perhaps most interestingly, the number of people buying property for business purposes has increased rapidly over the past three years:

  • The percentage of people buying for business purposes has more than doubled from 15% in 2021 to 33% in 2022 (0% of enquiries in 2020 were for business purposes).
  • Less people bought property for the use of holiday lets, HMO and letting. 21 buyers were buying holiday lets in 2021 and just 8 in 2022.

The fact people can travel abroad once again safely following on from the pandemic may explain the decrease in enquiries for holiday lets. However, the rapid increase in those looking to buy for business purposes could involve many reasons.

More people buying for business purposes potentially sets first time buyers back even more. On the other hand, investing in property for business purposes can somewhat serve a purpose in communities either by creating commercial spaces for work or by providing more available properties to let.

Landlords Opportunities Haven’t Taken a Knock

As fewer people are stepping onto the property ladder, business opportunities didn’t stop for landlords. Letting whole increased by 1% between 2021-2022, remaining at around 1 in 6 cases.

Of Bird & Co’s conveyancing clients in 2022, 17% were buying a buy-to-let (only 1% buying a holiday letting and 1% buying an HMO). In 2021, the percentage of buy-to-let buyers was 14% showing that the property market is still a tantalising business opportunity for many.

First-Time Buyer Statistics 2022

There’s still a clear disparity between second and first-time buyers. Taking a further look into this disparity, our statistics have highlighted some key problems.

Despite the known risks of not getting the best mortgage deals, most of Bird & Co’s clients were still first-time buyers, as 68% of buyers in 2022 didn’t own another residential property. This is a similar story to the previous year, when around 71% of prospective clients were first timers too.

That said, as we can see, there are still a huge proportion of buyers who already own a residential property. The small decline in first time buyers could suggest issues with affordability, whilst landlords or second-time buyers continue to take properties off the market.

Marrying up with these figures are the statistics surrounding main residence purchases. In fact, nearly 1 in 4 purchases in 2022 were not intended as main residences, suggesting these buyers were buying for second home, business or letting purposes.

The statistics also show that even fewer people bought new builds than in 2021, with a 1% decrease overall. This could help explain the drop in first time buyers, as some government schemes only apply to new builds.

What Does the Government Need to Focus on in 2023?

With the decrease in first time buyers, and the struggle to get on to the property ladder evident, it is clear that more needs to be done to encourage those who may be ready to buy to take the plunge. Truly, there are much more fundamental changes that must be tackled before the picture improves. These include, but are not limited to:

  • Affordable housing.
  • Updated housing schemes to suit the current state of affairs.
  • Keeping with the demand of new builds.
  • High living costs, making saving difficult.
  • High interest rates for first time buyers.
  • The lack of homes available to purchase, which does not meet the current demand.
  • Mortgage lenders being sceptical of lending to people when they’re paying just as much in rent.

Looking Ahead to 2023

Looking back to 2022, it’s clear that the glaring issues within the home-buying market still lie between first-time buyers and everyone else on the property ladder. In fact, as our 2022 home buying statistics demonstrate, there’s still a long way to go before this disparity ever decreases, with figures worse last year than the previous in terms of first-time buyers.

Further changes from the government are needed in terms of schemes available to first time buyers that do not just apply to new builds. Our insider stats demonstrate that, so far, their current schemes are having no fundamental effect. Second- and more -time buyers are still snapping up many properties and filling the market with more rental homes and business opportunities. This is boosting the competitive nature of the rental market.

Whilst it may seem that the government has little control over what happens globally with the war in Ukraine at play, there could certainly be a lot more focus on making homes more affordable as well as the cost of living in general. Sky high interest rates and soaring inflation makes saving and the idea of buying a home less possible for future buyers. As ever, the 2023 property market needs a huge overhaul before we can tackle the home buying barriers for our young adults today.

If you’re looking to buy or sell your home in 2023, feel free to get in touch with the team at Bird and Co by calling 01476 591711. Alternatively, head to our website, at birdandco.co.uk, for a conveyancing quote. We look forward to helping you buy your dream home.

Methodology

These statistics have been sourced from Bird & Co’s internal database. The data has been collated from client form fillings. Any conclusions drawn are the interpretations of the Bird & Co researchers.

Please note, the researchers have taken each form question answer at face value. In cases where the client may not have filled out a question, we have taken the stats from those who have answered. Any discrepancies between question answers may be attributed to this.