Research by Wayhome, which used Halifax figures, found that in 2020, the first year of the pandemic, first-time buyers contracted by around 13.5 per cent year on year to 303,980.
This was the largest annual decline in the last decade and the third annual decrease between 2012 and 2020.
In 2021, first-time buyers rose by around a third to 405,230. This was partially due to the stamp duty holiday introduce in July 2020 acting as a catalyst for the market.
Wayhome said that this was the highest annual increase in a decade, and the first-time numbers for this cohort had exceeded 400,000 in that time period.
The firm continued that the decline in 2022 was the second highest over the past 10 years, with first-time buyer numbers dipping by 13.5 per cent in 2020, 0.5 per cent in 2019 and 33.9 per cent in 2015.
Wayhome said that whilst first-time buyer numbers had fallen from the high of 2021, the number of first-time buyers was above pre-pandemic levels and second highest for a decade.
Regional falls
The largest decreases in first-time buyers was in Wales and South East at 12.5 per cent, followed by Northern Ireland at 12.2 per cent and South West at 12.1 per cent.
The lowest falls were in East Midlands at 6.8 per cent, then the East of England at 8.2 per cent and North West at 9.4 per cent.
‘Very little help for first-time buyers’
Wayhome’s co-founder and CEO Nigel Purves said: “Despite the fact that the pandemic market boom pushed house prices to record highs, we saw a huge boost to the number of first-time buyers making it onto the property ladder and this was largely driven by extremely low mortgage rates, as well as the additional carrot of a stamp duty saving.
“However, this number has declined considerably over the last year and there’s no doubt that growing market uncertainty and a consistent string of interest rate hikes has contributed to this.”
He added that the “good news” was that more first-time buyers were making it onto the ladder when compared to pre-pandemic numbers, but there were worries that the downward trend could “become more prominent going forward”.
“The cost of borrowing remains substantially more expensive despite mortgage rates starting to level out and we’re yet to see any real reduction in the already sky-high cost of a home. What’s more, the Help to Buy scheme has all but shut up shop and so there is very little help available for the nation’s first-time buyers when it comes to tackling the sizeable cost of homeownership,” Purves explained.
He noted: “Gradual and shared homeownership models are really the only remaining step up, but we simply can’t fill the void alone, and so the onus is now on the government to step up and address the issue for those who simply can’t make the jump between the rental and housing markets.”
