51% of those who bought for the first time in the last five years regret not negotiating prior to purchase, according to new research from Barclays Mortgages.
52% of first time buyers – typically aged 32 – admit they have never negotiated for anything in their lives, with a further 53% carrying a fear of missing out in the “extremely competitive” market if they were to negotiate.
35% would avoid negotiations given the small pool of affordable housing available, as is indicated in recent market data from Countrywide Estate Agents, shared exclusively with Barclays Mortgages. Figures on property purchases made through Countrywide between April 2016 and April 2017 show that 21% of 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.
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 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.
| Region | Percentage of first time buyers paying over asking price | Average amount paid over the asking price by first time buyers |
| Scotland | 40% | £6,666 |
| Yorkshire and the Humber | 29% | £7,378 |
| West Midlands | 23% | £5,263 |
| South East England | 23% | £9,358 |
| London | 23% | £13,691 |
| North East England | 19% | £5,049 |
| East Midlands | 15% | £6,306 |
| North West England | 14% | £5,331 |
| East of England | 14% | £7,935 |
| South West England | 13% | £6,529 |
| Wales | 7% | £3,758 |
| GB average | 21% | £7,758 |
Source: Countrywide
This comes as 91% of first time buyers who purchased within the last five years, believe 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. Despite this, appetite to learn the skills of a good negotiator are strong with 66% wanting to be taught more.
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. Once a personal bond is formed it becomes more difficult to keep focused on the negotiation. A further 54% said they would haggle when they are on holiday outside of the UK, if it was accepted as part of local culture.
Despite the holiday haggling, 40% do not consider themselves to be good negotiators and admit that their parents are better trained in the art.
Peter Brooks, Barclays’ behavioural finance spokesperson, 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.”