The value of the first time buyer (FTB) economy is set to reach a total of £73.1 billion by 2024, according to latest research by Coventry for intermediaries in partnership with the Centre for Economics and Business Research (Cebr).
The research showed that FTB mortgage lending is predicted to reach £69.2bn by 2024, 15% above the level seen in 2019. Analysis by Cebr also shows that these borrowers are also expected to spend an average annual total of £3.9 billion on extra costs relating to home purchase by 2024. Therefore, the total contribution of FTBs to the economy will reach £73.1 billion in two years.
As it stands, the average FTB also spends £3,100 on additional upfront costs such as moving and legal fees as well as surveyor, valuation and mortgage fees. On top of this, each year, FTBs are estimated to spend £6,630 each, and £1.6 billion collectively, on renovating and redecorating their home within 12 months of moving in.
The combined total the typical FTB spends on top of their mortgage is close to £10,000 (£9,780). As critical advisers to FTBs, brokers are in the best position to educate clients on these additional costs before they fully commit to home ownership. People who’ve recently bought their first home really value the expert guidance their broker provided: almost three-quarters (74%) of FTBs judge mortgage brokers to have played an important role in their experience.
Jonathan Stinton, head of intermediary relationships at Coventry for intermediaries, said: “With the ‘first-time buyer economy’ set to reach £73.1 billion in the next two years, and FTB mortgages accounting for three in 10 property transactions on average, there is a clear need for advice and education, and this presents an unmissable business opportunity for brokers.
“By supporting FTBs before, during and after buying a home, brokers really demonstrate their value to new borrowers. Educating new buyers on the need to budget for additional costs, and going above and beyond to deliver quality service when there is a clear need for it can create life-long relationships with new clients, helping to secure repeat business and word of mouth recommendations.
“Our research will give brokers a deeper insight into the growing first time buyer economy, helping them take advantage of the opportunities new buyers bring. We hope that the research and practical advice will be helpful for brokers in the coming months to grow their businesses and to continue supporting FTBs in the best way possible.”
