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Home Buying Statistics 2023: Stagnant Number of First Time Buyers Throughout Year

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How did the housing market in 2023 impact buyer trends and patterns? Our internal statistics show the true picture.

Looking back at 2023, we saw huge ups and downs in the property market. Increased mortgage rates and the cost-of-living crisis meant demand for housing was set to decrease.

Looking at our internal client data from last year, we can see how home buying patterns really changed during this tumultuous year. Take a look…

Key Home Buying Statistics 2023

  • 68% of Bird & Co’s clients were first time buyers – no change since 2022.
  • Just under 1 in 3 clients were buying their second (or more) property.
  • 78% of people buying were intending to use the property as their main residence, compared to 76% in 2022.
  • The rate of people buying new builds has decreased from 14% in 2022 to 11% in 2023.

What do the 2023 House Buying Figures Show Us?

New Build Interest Has Decreased for 2 Years Running

The statistics show that there has been a slight decrease in the percentage of people who bought new builds than in 2023. This percentage also decreased in 2022, with figures as such:

  • 2021: 14.35%
  • 2022: 13.68%
  • 2023: 11.18%

This suggests that, despite government schemes to introduce more new build properties, interest may not be what we would hope.

Second - and First-Time Buyer Statistics 2023

Those investing in another property remained the same from 2022, at around 32%. There was also no change in the number of first-time buyers, remaining at around 68% in 2023. More specifically, our statistics show that:

  • Over 32% of enquiring buyers throughout 2023 already owned another residential property.
  • 13% of 2023 buyers had a partner who already owned another property.
  • 3% of people were related to the seller in 2023 compared to 4% in 2022.

Despite the known risks of poor mortgage deals, most of Bird & Co’s clients were still first-time buyers, as 68% of buyers in 2023 didn’t own another residential property. This is a similar story to the previous year, when around 68% of prospective clients were first timers too.

That said, there is still a huge proportion of buyers who already own a residential property. The small change 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 2023 were not intended as main residences, suggesting these buyers were buying for second homes or letting purposes.

Landlords and Holiday Lets in 2023

Our 2023 statistics show that 78% of people were intending to use the property as their main residence, compared to 76% in 2022. On the flipside, this meant that 23% of people were not intending to occupy the property as their main residence         - whether this be for rentals or holiday homes - a figure that has not changed since 2021, when it was a huge 58%.

Even so, within the Bird & Co demographic, that’s still 1 in 5 properties being taken off the market as rentals or second homes.

Looking more closely at the reasons people purchased in 2023, figures show:

  • 13% of enquiring buyers’ homes were purchased for letting.
  • 1% of enquiring buyers’ homes were purchased as HMOs.
  • 2% of enquiring buyers’ homes were purchased as holiday lets.

As we’ve seen throughout the year, there have been many changes to legislation, pushing some landlords out of the market. This is supported by these statistics, which show letting purchases have decreased from 17% to 13% between 2022 and 2023.

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), and this has remained similar at 31% in 2023.

It’s great to see businesses thriving in 2023, especially post-COVID. More people buying for business purposes can serve a purpose in communities either by creating commercial spaces for work or by providing more available properties to let.

The Landscape for Home Buying in 2023

Throughout 2023, many who wished to get onto the property ladder had one eye on house prices, which fell by 1.2% over the year, and the other eye on mortgage interest rates, which more than tripled.

Whilst the drop in house prices was seemingly good for aspiring homeowners, who may have hoped to snap up a bargain, our internal figures show there was very little difference in the number of first-time buyers in 2023 compared to 2022. This could be down to many reasons, but what is profoundly problematic is the affordability issues many in the UK face.

With borrowing costs at a historical high, and property prices continuing to tumble, many sit and wait, wondering if now is the right time to buy. For those who feel they can buy, they are limited by the shortage of homes available, with many government schemes only applicable to new builds.

Looking back to 2023, it's fair to say that for first time buyers the picture appears to be stagnant, with many holding on to precious savings waiting for the right time to make the move onto to the property ladder.

Looking Ahead to 2024

As 2024 unfolds, the housing market is likely to continue in turbulence due to the ongoing cost-of-living crisis, legislative changes for landlords, and high interest rates. These factors may lead to fluctuations in property demand, impacting house prices and the rental market.

Looking ahead, government policies will likely shape market trends, necessitating informed and proactive decision-making for buyers, sellers, and investors.

What Does the Government Need to Focus on in 2024?

Our insider stats demonstrate that, so far, current schemes are having minor impacts on the overall picture for first time home buyers. Meanwhile, second-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.

With the stagnation of first time buyers, and the struggle to get on to the property ladder evident, it’s clear new strategies are needed by the government to help create a more favourable environment for first-time buyers.

Homeownership needs to become a realistic and achievable goal for a broader segment of the population. As such, there are some fundamental changes that must be tackled before the picture improves. These include, but are not limited to:

  • Affordable sustainable housing.
  • Keeping with the demand of new builds.
  • Updated housing schemes to suit the current state of affairs.
  • Improving the cost-of-living situation.
  • Saving incentives
  • High interest rates for first time buyers.
  • Mortgage lenders being sceptical of lending to people when they’re paying just as much in rent

By combining these strategies, governments can create a more favourable environment for first-time buyers, making homeownership a realistic and achievable goal for a broader segment of the population.

Buying a Home in 2024?

There are some signs that there could be some positive changes in store for potential buyers in 2024, as mortgage rate have started to edge down. Reports show that investors are optimistic that interest rate increases have peaked.

However, despite this optimistic view, a rapid rebound in activity or house prices in 2024 seems very unlikely as consumer confidence remains low. Our internal stats show there has been little to no change in new buyer enquires, which is likely to continue on in 2024 until issues with affordability change at least.

If you’re looking to buy or sell your home in 2024, feel free to get in touch with the team at Bird & Co by heading to our website 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.