The number of homeowners selling up to move on has declined significantly over the last decade, while increasing numbers of people are buying property for the first time. In 2004, about 72% of all buyers were people who already owned their previous home. That figure has now dropped to 54%. If it continues to decline, there could soon be more first time buyers than prior homeowners looking to move.
The number of prior homeowners selling up in the first half of this year was 9% lower than for the same period in 2014. Although this is still 32% higher than the figure for early 2009, it is nowhere near the number of homeowners who were moving on to new properties before the economic crisis struck.
The number of first time buyers moving in the first half of this year was also lower than for the first half of 2014, by 10%. However, first time buyers have recovered from the crisis faster than property owners and they are now making up a much larger proportion of the market.
The Shift Towards First Time Buyers
The shift towards first time buyers has been helped along by opportunities such as Help to Buy, but it is also due to the fact that first time buyers escaped some of the hardships faced by homeowners during the crisis. Many people saw the value of their properties fall and were therefore unable to afford to move on.
The market now looks very different to how it did five or ten years ago and it is partly thanks to the rising proportion of first time buyers. Buying your first home can be a very different experience to moving between homes. First time buyers often need to invest more in new furnishings and they are able to make the move more quickly because of the lack of a chain. First time buyers also tend to be looking for different kinds of properties, buying fewer detached houses and a greater number of small flats. However, if current homeowners continue to see property values rise and the market becoming more attractive, there could be a shift back towards larger family homes as people start looking to move on from their starter homes.