Home » FTB market to top £73bn by 2024: Coventry for intermediaries

FTB market to top £73bn by 2024: Coventry for intermediaries

by administrator

The first-time buyer market will hit £73.1 billion by 2024 underlining its value to the UK economy, according to a report by Coventry for intermediaries.

The report, called The First Time Buyer Economy, forecasts that FTB mortgage lending alone is set to reach £69.2bn in two years, 15% above 2019 pre-pandemic levels.

These borrowers are also expected to spend an average of £3.9 billion a year on extra costs relating to home purchases such as valuations, mortgage fees and redecorating by 2024, up by 5.4% from this year.

The average FTB currently spends £3,100 on additional upfront costs such as moving and legal fees as well as surveyor, valuation and mortgage fees.

Each year, FTBs also spend around £6,630, or £1.6 billion collectively, on renovating and redecorating their home within 12 months of moving in. The combined total the typical FTB spends on top of their mortgage is £9,780.

The survey, jointly carried out with the Centre for Economics and Business Research, also finds that in the four years to January 2022, FTBs accounted for an average of three in ten UK property transactions. At their highest, in October 2021, they accounted for 38% of deals.

The vast majority of these new buyers are advised, with the value of brokers particularly high among younger buyers under the age of 45.

It adds: “Brokers play a crucial role in providing a helping hand, offering advice and reassurance on the home buying process, products, and the true costs of ownership. Our survey showed that an overwhelming majority (82%) of FTBs used a broker, and three quarters found their broker’s advice was either fairly (29%) or very (44%) important.”

The report adds: “FTBs play a crucial role in the housing market and wider economy, and brokers play a vital role in supporting them. Accounting for close to a third of purchases and sometimes more, it is difficult to overstate the importance of the FTB market.

“At the same time, it’s hard to ignore the challenges they currently face, which in some senses are unprecedented in the last few decades. Rising interest rates, the increasing cost of living and widespread uncertainty make buying a daunting prospect.”

Coventry for intermediaries head of intermediary relationships Jonathan Stinton says: “With the FTB economy set to reach £73.1 billion in the next two years, and FTB mortgages accounting for three in ten property transactions on average, there is a clear need for advice and education, and this presents an unmissable business opportunity for brokers.

“By supporting FTBs before, during and after buying a home, brokers really demonstrate their value to new borrowers.

“Educating new buyers on the need to budget for additional costs, and going above and beyond to deliver quality service when there is a clear need for it can create life-long relationships with new clients, helping to secure repeat business and word of mouth recommendations.”

Coventry for intermediaries said its survey interviewed more than 1,000 recent FTBs.

Original Article

Related Posts