Insights into UK housing trends: First-time buyer stagnation and a shift in property preferences

The latest data from UK conveyancing solicitors, Bird & Co, offers a comprehensive view of the housing market's dynamics in 2023. The findings highlight intriguing trends in first-time home purchases, rental properties, and commercial real estate inquiries.

In 2023, 68% of Bird & Co's clients remained first-time buyers, reflecting no change since 2022. Surprisingly, just under 1 in 3 clients were purchasing their second or subsequent property. Notably, 78% of buyers intended to use the property as their main residence, a slight increase from 76% in 2022. However, the data also reveals a decrease in the rate of people buying new builds, dropping from 14% in 2022 to 11% in 2023.

A significant revelation emerged as 1 in 5 properties were taken off the market for rentals or as second homes. In 2023, almost 1 in 4 property acquisitions (23%) were not intended for primary residency, indicating a considerable interest in second homes, holiday properties, or rental investments. Moreover, over 32% of enquiring buyers throughout 2023 already owned another residential property, a figure unchanged since 2021.

Daniel Chard, Partner at Bird & Co, provided insights into the forecast for 2024, stating, "We predict that mortgage rates will decrease post-peak in 2023, leading to increased housing demand and market stabilization. Looking ahead, government policies will shape trends, requiring informed decision-making for buyers, sellers, and investors."

Chard also highlighted the challenges faced by first-time buyers, calling for new strategies from the government to create a more favorable environment for them. With the current stagnation in first-time buyer activity, addressing this issue is crucial for fostering a balanced and dynamic housing market in the coming years.