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Introducing a new wave of property owners - the "Accidental Savers"
There’s no denying that the impact of the coronavirus has greatly influenced a change in lifestyle and habits. The coronavirus crisis has seen over 6 million people in the UK become “accidental savers” with people improving their financial position improve with fewer travel costs, holidays and eating out. These savings have contributed to people being able to save more, with many accumulating thousands of pounds over the last twelve months.
It’s clear that within Northern Ireland and the wider UK the property market is booming at the moment, in part due to the recent extension of the stamp duty holiday and continued strong demand. There has been a surge in house buyer inquiries in Northern Ireland over the last year and research from the RICS, suggests that last month saw the highest level of new inquiries in its residential survey’s 15-year history. A key reason for this is due to the pandemic causing a surge of “accidental savers” now able to afford to jump on the property ladder when they wouldn’t have been able to before the pandemic.
Terry Robb, Head of Personal Banking at Ulster bank says that:
“Despite the restrictions in place during the quarter, people have continued to apply for mortgages and move forward with home purchases and house moves; and, of course, there are re-mortgages happening as well. Looking to the three months ahead, our pipeline suggests that mortgage activity will continue to be strong.”
So what are the contributing factors to these “accidental savers”?
Well, first and foremost, mortgage rates remain competitive, and this will help boost borrower affordability and confidence. Even the mortgage availability for those with smaller deposits has been improving, with lenders returning to the 90% and 95% mortgage markets. With the average house price in Northern Ireland being £147,593, buyers taking advantage of the 95% mortgage scheme will only need to put down a £7,379.65 deposit, whereas previously this deposit may have been as high as £29k+.
As for all the renters out there, many people are looking at the perks that come with getting on the property ladder. A recent statistic showed that a key incentive to buy is that first-time homebuyers are, on average, £539 a year better off than house renters in Northern Ireland.
What are the trends we’re seeing and what will this look like in the future?
The pandemic has led buyers to put lifestyle before location and to buy larger homes with gardens in the countryside, instead of urban dwellings. While gardens will be an increasingly important factor for homeowners moving forward, so too will space for home offices as more employers are allowing their staff to work from home on a regular basis, even post lockdown. Lockdown has proved that working from home can be successful, so it’s a trend that is likely to continue past the pandemic.
Additionally, a growing number of Northern Ireland-born people are moving home after years spent living in Great Britain, drawn back by cheaper house prices and the ability to work from home.
Where Brexit is concerned, we’re not likely to see any more of an impact on the housing sector – for a little while at least. The coronavirus pandemic has seen mortgage interest rates plummet to record lows. Most predictions indicate that now that a Brexit deal is in place, it is unlikely to have any further impact on the housing sector, at least in the short term
Overall, the year ahead looks to be another strong one for the property market. This past year has certainly shifted the way the nation views the property, and although we expect house prices to fall after the Stamp Duty Holiday extension ends, we predict ongoing demand from first-time buyers and accidental savers investing throughout 2021.
So you’ve saved all this money, what’s next? We’ve made a checklist for what to do:
At Rea Estates, we’d recommend the following websites for knowing what you’ll be able to afford:
NI Direct Advice on Mortgages for First Time Home Owners
Money Advice Service Guidance on How to Find the Best Mortgage For You
Which.com Mortgage Comparison Tool
If you’re an accidental saver and you’re looking to find your first home, get in touch with one of our estate agents, who would be happy to provide you with more information at hello@reaestates.com.
About Rea Estates:
At Rea Estates, we provide award-winning services to a wide range of clients and we are highly specialised in all aspects of sales, lettings and management.
We sell, let, and manage property across the greater Belfast area and North Down. We also provide comprehensive property investment services, including property sourcing and property procurement, refurbishment and project management, and tenant sourcing and tenancy management. Our property services are entirely bespoke based entirely on the requirements of the client.
