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First time buyers priced out of the South of England

Q2 2021 Property & Homemovers Report from TwentyCi

The South of England is now unaffordable for first-time buyers without access to additional deposit funds over 10 per cent reveals the Q2 2021 Property & Homemovers Report from property and data insight specialist, TwentyCi. The average Loan to Income (LTI) value for properties in the South now stands at 5.78, driven up by Inner London which has an LTI value of 7.7. Mortgage lenders are limited by the Financial Conduct Authority (FCA) on the number of mortgages they are allowed to issue at more than 4.5 LTI value which for many first time buyers rules out the South. The North East of England and Scotland are currently the most affordable locations for first-time buyers both with an LTI value of 2.3.

The lack of affordability is further exacerbated by the acute lack of stock coming to the market. Aside from London, the whole of England and Wales at a regional level has between two and 1.7 months of property stock left to sell. Overall, the available months of stock numbers are down by half on historical norms. The South West has the lowest level of houses for sale, whilst Inner London currently has the most.

The lack of stock is resulting in demand outstripping supply which is driving up house prices. The average asking price across the UK in Q2 2021 is now £391,000 compared to £361,000 in Q2 2019, an increase of 8.3 per cent. Wales and the North West have experienced the highest year-on-year price rises at 22 per cent and 20 per cent respectively. Inner London and Scotland at three per cent and 10 per cent have the lowest growth rates.

In comparison to Q2 2019 new instructions have fallen by four per cent, whilst the number of sales agreed has risen by 33 per cent and exchanges have increased by 18 per cent. The number of price changes is also significantly down (-39 per cent) as is the number of properties being withdrawn from the market (-21 per cent). With demand exceeding supply there is less requirement for discounting and less stock encourages buyers to remain in transition rather than look for an alternative.

Despite the stamp duty holiday at the £500,000 threshold coming to an end and the £250,000 threshold finishing in September the number of people wanting to move has risen by 11 per cent since last quarter now accounting for 428,567 indicating that it is unlikely the property market will slow down significantly this year. Those Moving Soon and Moving Now have also increased by 16 per cent and 23 per cent respectively. Compared to Q2 2019 the number of households in the moving journey is up by over 40 per cent, with an additional 500,000 households entering, progressing or completing the process of moving. This significant shift in the behaviour of the homeowners can bring huge gains and strong ROI across multiple sectors and categories particularly as home movers are proven to contribute an additional three per cent GDP per annum over and above the purchase price of the home.

Comments Colin Bradshaw, Chief Customer Officer, TwentyCi:
“Getting on the property ladder has always been tricky, however, for people in the South of England it is now impossible without additional funds over and above an average mortgage and a 10 per cent deposit. As we know the pandemic has changed the way people live their lives and as a result of this and a generous fiscal policy, the property market is booming. However, with the stamp duty holiday coming to an end it remains to be seen whether there will be a significant increase in transactions falling through as a direct consequence of missing the incentive of the deadline.”

Notes for editors
TwentyCi is a home mover & behavioural data agency that delivers strategic data, insight and engagement solutions.
Holding the UK’s largest and richest resource of factual home mover data compiled from more than 29 billion qualified data points, TwentyCi works with advertisers and their agencies to create contextually targeted marketing programmes that cut through by reaching consumers at the exact moment that they need a company’s product or service, through the best media channel for that individual.

Please note that our publication normally provides a year-on-year comparison of the residential market, however, given the extraordinary impact on the market arising from the Covid-19 pandemic and the unique events affecting the property market during 2020, for this report the comparison looks back at 2019 to provide a ‘near normal’ comparison

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