Housing market revival: first-time buyers drive £350 billion surge

The housing market has experienced a significant revival, surpassing its pre-pandemic average size as first-time buyers re-enter the market. Recent data from Savills indicates that total spending on house purchases exceeded £350 billion in the year ending June, marking a notable recovery. This resurgence was particularly evident in the second quarter of the year, where £88.3 billion was spent, reflecting an 8% increase compared to the same period in 2023. A key driver of this growth has been a 22% rise in mortgage debt provided by lenders, which has facilitated more purchases. First-time buyers played a crucial role in this recovery, with their spending reaching over £21 billion in the second quarter, an increase of £4.1 billion from the previous year. This trend highlights the renewed confidence among new entrants in the housing market. As interest rates are expected to ease, further expansion in the housing market is anticipated. Many individuals are looking to trade up, which could lead to increased activity across various segments of the market. The combination of first-time buyers returning and existing homeowners seeking to upgrade their living situations suggests a robust outlook for the housing sector. Overall, the data reflects a positive shift in the housing market, driven by first-time buyers and supported by favorable lending conditions. This revival not only indicates a recovery from the pandemic's impact but also sets the stage for continued growth in the coming months.