First-time buyers not put-off by rising prices in 2020

15th February 2021

According to the latest research by Halifax, despite rising house prices, first-time buyer transactions rose 52% in the second half of 2020 from 121,050 to 183,607. That’s down just 2% on the number of transactions in the same 6-month period in 2019 and good news for those who are looking to sell in 2021!

Perhaps the lockdown has made the need for personal space a priority, or maybe the time to reflect and reassess their living arrangements has spurred some on to finally take the leap onto that first rung of the ladder while the opportunity was there.

The local first-time buyer market is undoubtedly vibrant right now and is being supported by a number of factors that are helping anybody on the look-out for their first home.

Stamp Duty Discount

While we continue to wait and see if the Stamp Duty Holiday will be extended past its March 31 deadline (nobody here is holding their breath), first-time buyers can still benefit from paying less, or no tax. If and when the zero-rate band on purchases up to £500,000 ends, there will still be nothing for first time buyers to pay on a property up to the value of £300,000, and for properties between £300,001 to £500,000 there is a reduced rate of 5%.

Help To Buy

First time buyers can take advantage of the current Help to Buy Equity Loan scheme when purchasing a new home under £437,600. The loan allows for just a 5% deposit by borrowing an interest-free equity loan for 5 years to make the deposit up to 25%, creating a smaller mortgage. We will be happy to explain the scheme to you to see if it suits your financial needs. 

Sussex house prices remain strong

With the end of the stamp duty holiday approaching, demand across the board is easing and, as a result, January saw a fall in house prices. According to Nationwide, house prices nationally dropped an average of 0.3% to £229,748 between December and January.

Although we’re not noticing any reductions in Sussex, any signals that now could be a buying opportunity tend to encourage more people into the market. If anything, we are seeing people from London and the surrounding, looking to move down for the occasional commute as the need to live near the capital reduces.

Mortgage lenders offering 90% lending to first-time buyers

Another positive for first time buyers is that lenders are opening up their offering to this group again after many withdrew at the start of the pandemic outbreak. The likes of Santander, Halifax and Nottingham Building Society are all relaunching 90% mortgages for first-time buyers, while Nationwide and HSBC are reducing their rates. These offers aren’t as good as the 95% offers seen pre-lockdown, as lenders remain cautious, but it could make all the difference to whether a buyer can afford to make that purchase.

For all your property advice, including developments, call Oakley, Your Sussex Property Expert on:
Lewes 01273 487 444
Brighton 01273 688 881
Shoreham 01273 661 577


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