BUYER PROFILES 2023
26% of buyers in our markets this year originated from outside of the UK and Europe. That is significantly higher than the long term average of 16%. There was above average activity from USA, Middle East and Australasian buyers. Far East was higher than in the most recent 3 years but in line with the long term average. This reflects the favourable pricing in the UK and for some an exchange rate advantage too.
There was also much higher representation this year of European buyers, who accounted for 21% of all sales, compared to their long term average of 16%. All of this means that British buyers were reduced from the average of 68% to just 53% this year – which we put down to the combination of interest rates and service charge rates both of which have deterred domestic buyers.
The proportion of sales to Buy to Let investors in our markets has halved from a long-term average of 16% to just 8% this year. It is interesting to note that there has been a corresponding increase in the category ‘Parents buying for children’ up from 8% over the long term to 13% in 2023. These figures from sales in our own offices reflect a wider social trend of people using capital to help the next generation of their own family navigate the housing market, rather than become a third party landlord.
The age distribution this year was very much in line with the long term average. In the first half of 2023, we noted a steep increase in younger buyers (29% under 30 years old) but that trend had faded by the year end and the twenty-somethings accounted for 18% overall in 2023 – because activity in this age group dipped well below the long term average during the second half of the year.
The counter-balancing trend was a reversal of the decline in thirty-somethings – as a group, they were back to their long term average by the year end, after being significantly down in Half 1. Interest rates have been the primary driver of buying decisions for young people this year but for those who have saved a large deposit, there are opportunities to buy at a favourable price. We assume that this benefited those slightly older buyers who have had longer to save a capital sum.
Almost half of buyers in our markets this year were entirely funded by cash. That is not unprecedented, cash buyers have always been a significant force for us, but it has risen in the past 3 years, from the long-term average of around a third. The proportion of buyers relying on a mortgage to finance more than 75% of the property value has been fairly consistent over time at around a fifth of buyers.