Younger buyers more confident in getting on the ladder

house value

First-time buyers are now more confident of getting on the property ladder than at the start of 2023, research conducted on behalf of HSBC UK has revealed.

Nearly seven in ten (68%) people hoping to buy their first home in the next 12 months say they’re more confident about getting the keys to their dream property than they were at the beginning of the year.

Nearly three-quarters of homebuyers (73%) say they’re looking for a house that needs work to keep the initial costs down.

Andrew Matson, head of mortgages at HSBC UK said: “It’s encouraging to see more optimism amongst first time buyers. The first half of this year has been challenging, but the shift in attitudes is reassuring and highlights the resilience of the housing market.

“At HSBC UK, we have been supporting our customers through the recent economic challenges in a number of ways, this includes providing support under the Mortgage Charter. We have also developed an online guide for first time buyers and I would encourage anyone looking to purchase their first home to use the guide.

“While we don’t have a crystal ball to see what the future holds, it is pleasing to see the positive sentiment running throughout our research  and we will continue to lean in to help support our customers.”

A variety of reasons were highlighted for wanting to buy, with first-time buyers stating it is cheaper than renting (21%), closely followed by wanting their independence (20%), financial security (17%) and providing for their family (14%).

Only one in nine (11%) said it was because they regarded their first home as an investment.

The survey also found that in some major cities such as London, Manchester and Newcastle “independence” came out on top for reasons to buy a property, while in Liverpool it was “financial security”.

Meanwhile, those in Wales (64%) and Yorkshire and the Humber (63%) were found to be the most confident about affording a mortgage deposit now or within the next 12 months. Those in East Midlands (52%), the North East (53%) and Northern Ireland (53%) were the least confident.

Around seven in ten (68%) people were found to use a savings account to put money away for a deposit, with just under one in four (24%) using an ISA.

How consumers find a mortgage provider was clear from the survey, with using a broker or financial adviser the most popular way to get information about the market, followed by the websites of mortgage providers themselves.

Top 5 sources for mortgage information

–               Broker/adviser (41%)

–               Online – mortgage provider website (30%)

–               Online – comparison sites (28%)

–               Online – money saving websites (25%)

–               Friends/family (22%)

And when it comes to picking a mortgage provider, cost is the number one driver, but it is closely followed by getting a recommendation from an expert and choosing a brand they trust.

Top 5 reasons for choosing a mortgage provider

–               Most cost-effective mortgage option (32%)

–               Broker or adviser recommendation (31%)

–               A brand I trust (26%)

–               Existing customer wanting finances in one place (21%)

–               Recommendation from family or friend (11%)