The first-time buyer economy is set to reach a total value of £73.1bn by 2024, new research by Coventry for intermediaries in partnership with the Centre for Economics and Business Research (Cebr) has suggested.
According to the findings, first-time buyer mortgage lending is predicted to reach £69.2bn by 2024, a figure 15% above the level seen in 2019.
Analysis by Cebr also revealed that these borrowers are expected to spend an average annual total of £3.9bn on extra costs relating to home purchase by 2024. This would take the total contribution of first-time buyers to the economy to £73.1bn in two years.
Currently, the average first-time buyer is spending an average £3,100 on additional upfront costs, such as moving and legal fees as well as surveyor, valuation and mortgage fees. On top of this, first-time buyers are estimated to spend an average £6,630 each year, and £1.6bn collectively, on renovating and redecorating their home within 12 months of moving in.
The research showed that the combined total the average first-time buyer is spending on top of their mortgage is £9,780.
As critical advisers to first-time buyers, Coventry for intermediaries stated that brokers are in the best position to educate clients on these additional costs before they fully commit to home ownership.
“With the first-time buyer economy set to reach £73.1bn in the next two years, and first-time buyer mortgages accounting for three in ten property transactions on average, there is a clear need for advice and education, and this presents an unmissable business opportunity for brokers,” said head of intermediary relationships at Coventry for intermediaries, Jonathan Stinton.
“By supporting first-time buyers 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.”
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