Challenges and Opportunities in the Housing Market: An Analysis for First-Time Buyers and Second-Steppers

As the housing market continues to show signs of growth, new data suggests that activity is increasing at a slower pace for first-time buyers and second-steppers who heavily rely on mortgages. The number of new sellers in these segments has risen by 10%, while agreed sales have only increased by 9% and 13%, respectively, compared to last year.

One of the main reasons for this slower growth is the persistently high mortgage rates, which have remained elevated longer than anticipated. This has particularly affected those looking to move within these sectors. Despite the challenges for buyers, the total number of agreed sales has reached the same level as in 2019. However, this comes amidst significantly higher mortgage rates, averaging 4.84% compared to 2.45% in April 2019, and a notable 22% increase in average property prices.

Although affordability remains tight, average wage growth of 27% over this period has somewhat offset the challenge, slightly outpacing house price growth. Rightmove has cautioned that a market slowdown may be on the horizon for various reasons, including distractions like the Euro 2024 football tournament, the Olympics, and a possible General Election in the second half of the year.

Tim Bannister, from Rightmove, advises potential home buyers to consider making a move now before these distractions arrive. He notes that property and mortgage market conditions remain stable, buyer choice is good, and many sellers may be willing to negotiate on price to secure a deal. The increase in activity suggests that many home movers are already taking action to make their move.

With these insights in mind, it may be a good time for those considering a move to act swiftly and take advantage of the current market conditions.