We’re comfortable talking about first time
buyers, a journey given much scrutiny and much measurement, but we are much less likely to talk about those moving for the first time.
Often these first-time sellers are going on just as challenging a journey as first-time buyers, with the added complexity of managing the sale of their home, while finding a new one to live in – all the while trying to get timings for both to line up.
In more expensive markets across London and the South East buyers sell their first home most quickly, in an average of just four and a half years. Here deposits for a first home tend to stretch only as far as a small flat. In the Capital 61% of buyers bought a home with one or two bedrooms, 79% in Inner London. However small flats don’t allow much space for changing circumstances, so any change in life stage, such as becoming parents, is more likely to trigger a move.
It is in places where affordability is most stretched that the ability of first-time movers to move on is most important. With fewer areas and properties affordable to those buying their first home, first-time buyer villages have sprung up. In some corners of London cheaper homes are sold from one first-time buyer to another. Three quarters of the homes sold by a first-time buyer in the capital are bought by another one, a figure which falls to a third outside London. In London and the South East, the number of first time movers has a direct impact on the number of homes available for those wanting to buy for the first time.
Further North and in cheaper parts of the country, first-time buyers tend to buy much bigger homes. Here the best part of 70% of first-time buyers buy a home with three or more bedrooms and as a result new buyers stay in their first home for longer. North of Manchester the first-time buyer stays in their home for of seven years, compared to five in the South. The distinction between homes bought by first-time movers and those bought by those making their third or fourth move is much more blurred.
Most governments see it as their duty to help would-be first-time buyers, and the current Help to Buy scheme has helped thousands of people buy their first home who probably otherwise wouldn’t have been able to. But do the increasingly different profiles of those taking their second step on the property ladder mean that government cash could be better targeted by moving away from a one size fits all approach? Helping all would-be first-time buyers equally does undoubtedly help someone who could afford a smaller home to buy a bigger one. With a property market that is more divided than ever before, could the government’s first-time buyer budget be better spent helping renters or second steppers in different parts of the country?
Our next feature in this weeks Snakes and ladders series looks at those in the middle of the housing journey. Having traded up from their first homes people at this point of the journey tend to linger the longest.