The biggest mistake many first time buyers make is to rush into decisions and then panic once they have been made
New research from Barclays has found that 52% of first time buyers have never negotiated and a further 53% admitted they fear missing out in the “extremely competitive” market if they were to negotiate.
The lender's analysis discovered that 51% of those who bought for the first time in the last five years regretted not negotiating prior to purchase. But 35% would still avoid negotiations given the small pool of affordable housing available.
Figures on property purchases made through Countrywide between April 2016 and April 2017 show that one in five (21%) British first time buyers paid over the asking price for their property, forking out on average an additional £7,758 to secure their chosen property.
Surprisingly in England and Wales it’s not Londoners but those in Yorkshire and Humber who proved to be the most likely to go over the asking price with almost a third, 29%, paying more than the initial selling price. In Scotland, the figure is even higher at 40% but this reflects the fact that properties are often purchased through the sealed bid system.
This comes as a huge 91% of first time buyers say there is not enough negotiating advice available from trusted sources. In fact, 30% have admitted to being confused by the limited information available and 42% are still leaning on their parents for negotiation advice.
Proving that not all first time buyers are negotiation adverse, 55% said they feel comfortable negotiating through an estate agent if they haven't formed a relationship with the homeowner during a viewing.
Peter Brooks, Barclays Behavioural Finance expert, said: “Buying a property is the biggest investment of most people’s lives and it’s imperative that the negotiation process is approached with a healthy combination of pragmatism and fearlessness. The biggest mistake many first time buyers make is to rush into decisions and then panic once they have been made. Always remember to balance your approach and referring to informed and independent advice will allow for a smoother negotiating process for all parties.”
Craig Calder, Director of Barclays Mortgages, added: “Barclays Mortgages research shows that the fear of first time buyers missing out on their ideal property purchase contributes to 53% feeling unable to negotiate, with almost a third (31%) willing to be prepared to pay above the asking price.
We have helped over 3,500 first time buyers get on to the property ladder in 2017; and we understand the often-challenging process that all first time negotiators go through when purchasing.
Despite 85% of first time buyers describing the housing market as being “extremely competitive”, our tips on negotiating will help to provide the confidence needed to achieve the right purchase price.”