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Increasing Numbers of First-time Buyers Are Spending over £1m on Their Properties

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House prices are rising, buyers are paying well over the asking price, and many cash offers are being made. In spite of the pandemic, the demand for houses remains strong and it seems as though first-time buyers are having to find ways of competing in a thriving market.

Research from Hamptons has found that 7% of first home purchases cost over £500,000 in 2020 and over 6,000 buyers spent over £1million on their first property.

The property market in 2020-21

When the nation first entered lockdown in April 2020, concerns about how it would affect the property market spread across the industry, causing lenders to rethink their offering, sellers to rethink their prices and buyers to rethink their requirements.

As the initial lockdown in 2020 reached an end, the government sought to boost the property market through the introduction a Stamp Duty holiday. Alongside measures from lenders, such as the reintroduction of 95% mortgage offers, this does seem to have had the desired effect, with strong demand for properties.

Almost a year later, statistics show that house prices have been rising by around 9% year on year, and more buyers than ever before are paying well over the asking price to win their dream home.

Data from Propertymark states that in May 2021, for every property for sale on the market, there were around 20 active buyers, and that over a third of properties sold for more than their asking price. Data from Rightmove shows these numbers to be quite significant when compared with the fact that since 2005, an average of just one in ten properties have sold for over the asking price. 

First-time buyers in 2020-21

For many first-time buyers, trying to get on the property ladder in this increasingly competitive market is tough. However, dreams of leaving the rental market behind, escaping the inner-city life, heading to more suburban and rural areas and working from home for the long-term, have spurred on many to find their ideal home and jump onto the property ladder, but at a higher price than anticipated. 

When London estate agents, Hamptons, carried out research into property sales throughout 2020, they found that one in fifty first-time buyers paid at least £1million to secure their first home.

Perhaps unsurprising, the majority of these types of purchases were made in areas around the capital where prices tend to be significantly higher anyway.

The data shows that 67% of first-time buyers in Westminster spent over £1m in 2020, compared to 50% of those in Hammersmith & Fulham, with other southern locations such as Sevenoaks, Reigate and Banstead, and South Bucks following. The research also found that 7% of first-time buyers made successful offers on properties for the value of £500,000 and over, an increase of 3% since 2019. 

All of this points to a very active market after the lull of early 2020. What’s more, despite the fact house prices are rising and government incentives are reaching an end, it’s promising to see that first-time buyers are just as interested in stepping onto the ladder as they were in pre-pandemic times. 

Property conveyancing for first-time buyers

For first-time buyers, the process involved with purchasing a house can seem complex, lengthy and confusing. If you’re feeling at a loss or have a multitude of questions about where to begin, what to look out for and what’s required from you, you’re not alone. It’s completely natural to find the process daunting, which is why there are countless experts in the field, dedicated to providing a quality conveyancing service to help make your property purchase less stressful.

At HPLP Solicitors, we specialise in housing and property law. We provide expert advice and support to anyone looking to purchase a property, including first-time buyers. We can guide you through all of the details and keep you up to date with the progress of your purchase. Our aim is to make your first time buying a home an enjoyable experience and so we strive to ensure everything is dealt with in a timely manner. 

We can accommodate all conveyancing requirements, from reviewing contracts, handling second charges on properties, offering advice on restrictive covenants, managing new build property research and more. 

Contact our residential conveyancing solicitors

To find out more about our services and our team, or to get started with your very first property purchase, feel free to reach out to our expert residential conveyancing solicitors.

We are more than happy to answer any initial questions and, if you choose to go ahead with HPLP Solicitors, we will walk you through the entire process, step by step. To see how much your conveyancing might cost, you can take a look at our residential purchase pricing.

To speak to us about buying your first home, you can use our simple enquiry form or call <add click to call number>.