Property: Has Covid pandemic helped first-time buyers?

At the beginning of the pandemic there were fears that the property market was going to become even more inaccessible to first-time buyers.

Mortgages suitable for those with low deposits virtually disappeared, and rising house prices meant that many would-be homeowners were being pushed out of their price range. According to Halifax, the average house price over the course of the pandemic has risen to around £260,358, an increase of around £22,000 nationally.

But a recent survey by Yorkshire Building Society, which has branches in Norwich, Diss, Swaffham and King’s Lynn, paints a slightly different picture. 

Only a fifth (21%) of the 2,000 respondents surveyed from across the UK – and who all hope to get on to the property ladder within the next three years – believe that the ongoing health crisis has caused them to delay their plans. Job losses and furlough were listed among the main concerns.

In contrast, more than two-fifths (44%) of first-time buyers surveyed expect that the pandemic will actually help them get on to the property ladder sooner than expected – largely because more people have been able to save.

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Nearly half (48%) of those polled said they have been able to save more towards their first home, with an average increase of more than £500 per month.

And, according to the survey, men were able to save more money than women, saving an average of £640 per month compared to £360.

Ben Merritt, senior mortgage manager at Yorkshire Building Society, said: “Our research shows that for those who have benefited financially from the impact of the Covid-19 crisis, it’s fuelled the ability to save more for a first home and brought the first step on the property ladder closer than people previously expected.

The Government-backed 95% Loan-to-Value mortgage scheme aims to help first-time buyers or those with low deposits to buy a home
– Credit: Getty Images/iStockphoto

“The first-time buyer market is swiftly heading back to pre-Covid levels of mortgage choice and availability, and, with smaller deposit options having made a comeback, and new Government support on the table, first-time buyers could have good reason to be optimistic.”

Earlier this year, Chancellor Rishi Sunak announced the return of 95% Loan-to-Value mortgages, under a Government-backed scheme to encourage more first-time buyers to make a purchase with a lower deposit, at the same time as offering more reassurance to lenders.

The scheme is expected to run until December next year and applies to Loan-to-Value mortgages on main residential properties up to the value of £600,000 – although it cannot be used on new-build properties. 

But despite the savings and the new Government-backed initiatives, many first-time buyers are still facing hurdles.

Almost a third (31%) of those surveyed said they expected to save for up to two years to afford their first property, while around a fifth (22%) said it could be nearer to ten.

Mr Merritt continued: “With a fifth of first-time buyers having had their plans delayed by the pandemic, and the same saying they expect to have to save for up to a decade, it’s a stark reminder that the up-front costs of purchasing a house still prove too big a barrier to overcome for some.”

Where you could buy – and how much for

Last year, Zoopla data revealed that the average cost of a first-time buyer home was £220,000, although it varies across the country and even by local authority.

Family homes in particular have shot up in price in recent months, particularly as people have chosen to move out of bigger cities, to find more space in the country, which means that prices on properties ideal for first-time buyers remain relatively stable.

Earlier this year Great Yarmouth was named the east of England’s most affordable place for first-time buyers. According to data published by Zoopla, the average cost of a first-time home in Great Yarmouth – commonly a three-bed semi – is £165,000.

In contrast, the most expensive area for first-time buyers in the county is in South Norfolk. There, the most commonly purchased property is a three-bed terrace, and the average price is £250,000.

What you could buy

Thorpe Drive, Attleborough – for sale for £175,000 with William H Brown

Inside the living room at this two-bed mid-terrace for sale in Attleborough
– Credit: William H Brown

Inside the fitted kitchen at this mid-terrace for sale in Attleborough
– Credit: William H Brown

The enclosed rear garden at this two-bed home for sale in Attleborough
– Credit: William H Brown

The rear garden is split level and enclosed
– Credit: William H Brown

A two-bed mid-terrace close to a popular town centre with an enclosed garden, living room, kitchen/diner and one allocated parking spot.

Yarmouth Road, Norwich – for sale for £210,000 with Minors & Brady

A two-bedroom apartment at Albion Court, Thorpe St Andrew, on the outskirts of Norwich
– Credit: Minors & Brady

Inside the kitchen at Albion Court
– Credit: Minors & Brady

The sun terrace at this two-bed apartment in Thorpe St Andrew near Norwich
– Credit: Minors & Brady

One of two bedrooms at this apartment in Albion Court, for sale at a guide price of £210,000
– Credit: Minors & Brady

Modern two-bedroom apartment with easy access to the river, open-plan living spaces and underground parking.

Silfield Road, Wymondham – for sale for £225,000 with Savills

The Scarrow, a two-bedroom coach house, is for sale for £225,000
– Credit: Savills

Inside a typical Hopkins Homes show home similar to those at Birch Gate in Wymondham
– Credit: Savills

Inside a previous Hopkins Homes development, similar to Birch Gate in Wymondham
– Credit: Savills

Birch Gate, Wymondham, is well-located for access to the A11 and the town centre
– Credit: Savills

A newly built Hopkins Homes detached coach house with two bedrooms, a kitchen and an open-plan living area near to the A11 and amenities.

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