Despite a rise in the number of prospective first-time buyers saying they are more motivated to buy since the start of the pandemic and successive lockdowns, half who started the process of buying a property saw it fall through, losing an average of £2,912.
The figures form part of new research by Aldermore bank who found that 50% who's property purchase fell through stated this was due to lockdown. For first time buyers, the average cost of a house purchase falling through is £2,912, resulting in a total loss of £406,641,036 in the twelve-month period April 2020-March 2021. Prospective first-time buyers also say they have needed to delay their home buying plans by an average of 8.4 months due to the Covid-19 outbreak.
Rising buying fees
Lockdown and social distancing measures leading to delays have meant rising costs throughout the home buying process, which really add up. First-time buyers say the most costly expenses incurred include solicitor fees (£1,229), mortgage fees (£1,086) and conveyancing/valuation fees (£1,020). Other costs include rent paid due to delays in moving in (£989), estate agent fees (£988) and moving fees (£910).
Overall, first-time buyers that bought between March 2020 and March 2021 say they have experienced on average two months in delays and incurred an extra £5,870 in costs due to Covid-19. 70% say they spent more money than intended on their house purchase. These additional costs set first-time buyers back a total of £1.67bn between April 2020-March 2021.
Covid-19 changes first time buyer’s priorities
Despite setbacks and delays, prospective first-time buyers are determined to realise their home buying goals, with over four in five (85%) saying that owning a home is an important life goal. 63% of first-time buyers are more motivated to buy, but the type of home they are looking to buy has radically changed since the start of the pandemic.
67% say they are reconsidering the type of property they want to purchase due to Covid-19. Outdoor space is widely valued, with 66% prioritising having a garden or balcony or being near the countryside or parks (63%). Furthermore, 62% of new buyers say proximity to loved ones is an important consideration. As working patterns likely shift towards remote and flexible working even after the pandemic is over, having home office space (63%) and good wi-fi connection (67%) are also more of a priority.
Jon Cooper, head of mortgage distribution at Aldermore said: “The Covid-19 pandemic has motivated a great number of people to buy their first home. It is important, alongside raising a deposit, to identify and factor in any additional costs, such as solicitor, valuation and estate agent fees, as well as moving costs, all of which can add up.
"Seeking advice from a financial adviser or broker will help greatly in making the process less confusing. Although buying a house has its challenges, the reward can be great, illustrated by a large number of first-time buyers (84%) who said the stress was worth it and that becoming a homeowner has been extremely rewarding.
“Successive lockdowns over the past year have made us all re-evaluate how we live our lives, and what we need from our homes. It is no longer just a place to live, but a place of work, and where we exercise, educate our kids and socialise. As a result, the data shows a dramatic change in preference in the types of properties new buyers are looking for.”