Experts are hoping the housing market will recover after the number of first-time buyers who bought a home with a mortgage in 2023 was the lowest in a decade.
Yorkshire Building Society calculated that there were around 290,000 first-time buyers in the mortgage market in 2023 across the UK, the lowest number since 2013.
This was also down by just over a fifth compared to 2022, following a 20-year high in 2021 due to the impact of the coronavirus pandemic as people moved to working from home.
But some industry experts remain optimistic the housing market will recover. Rohit Kohli, director at the Romsey-based broker, The Mortgage Stop, said: “Many of the prophets of doom predicting a collapse in house prices have disappeared or are now reworking their numbers.
“The property market has an in-built resilience due to the lack of housing stock and in December that was boosted by demand right up until the day before Christmas.
“The lack of supply will further support prices in 2024, although high-end properties continue to see a reduction in their asking price and are still proving harder to sell.
“With a potential recession on the cards, it’s likely we’ll see some form of action taken by the Bank of England to try to stimulate growth in the first half of 2024, which will likely bolster prices further.”
Yorkshire Building Society said the fall in first-time buyers last year was less severe than the decrease in the overall number of buyers, the Society said.
The estimated proportion of first-time buyers represented a larger share of home buyers overall last year, at 54 percent, increasing from 53 percent in 2022.
The figure was also significantly higher than the 41 percent of buyers who were taking their first step on the property ladder a decade ago.
Ben Merritt, the Society’s director of mortgages, said: “First-time buyers are the lifeblood of the market and are still clearly keen to buy.”
He added that “the wider market relies on them, not least to support purchases higher up the chain”.
The group said that while activity across all borrower types had fallen due to pressures from higher interest rates, the cost of living and high house prices, first-time buyers remain determined to overcome these challenges to invest in their own bricks and mortar.
Yorkshire Building Society’s group economist, Max Shepherd, said: “Current market expectations suggest several rate cuts in 2024, which would ease mortgage rates in the first half of the year.”
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