Market update: Surge in first time buyers

For our social media followers throughout 2020, the impact of first-time buyers will come as no surprise. Altius Group is delighted to announce 149 completions so far in 2021. Of this number, a staggering 49% of deal completions are by first-time buyers.

At the beginning of 2021, we anticipated first-time buyers would substantially impact the market in the coming year. Our projection was based on evidencing the continued and ever-increasing first-time buyer registration levels. In Spring, we published our latest market report which noted the extensive interest we were witnessing in businesses for sale from first-time buyers. This interest has now materialised into a number of completions.

Our research and buyer intelligence notes two critical factors contributing to the first-time buyer boom—a fundamental shift in the motivations of first-time buyers and the optimum conditions for them to enter the market.

First-time buyers most cited motivations include a desire to relocate, a passion for a specific sector, or a lifestyle change. The easing of lockdown, staycation explosion, and increased buyer confidence are further driving factors behind this boom.

The strong market is driven by the greater ease with which buyers can finance transactions. Ultra-low interest rates, flexible bank mortgages, and high deposits from residential sales have created a pool of credible buyers who are funded and looking to invest.

We are witnessing deals across all sectors, industries, and locations. Kings Business, are seeing considerable interest in typically rural businesses, having closed on 26 deals. Askham Stores, a Lake District village store, was sold to first-time buyers looking to relocate and saw the business as a new lifestyle opportunity. A 100-year-old Post Office in Gosport was purchased by first-time buyers seeking a new venture and lifestyle change.

The childcare and healthcare sectors are not immune to the first-time buyer boom with 34 deals facilitated by Redwoods Dowling Kerr. Stompers Childcare Services Ltd, a reputable nursery in Aberdeenshire was sold to Flynn Nursery Group Ltd, first-time buyers with prior experience within the sector. Rock Residential Home, a renowned residential care home in Devon was acquired by a first-time buyer with experience in the care sector.

Bruce & Co has witnessed 13 first-time buyers entering the market drawn by operating a business they are passionate about and/or enjoying the spacious properties that can accompany the business sale. Recent examples include the stunning sales of Kinross Guest House in the town of Granton-on-Spey and The Steadings in Inverness-shire.

We expect high levels of first buyer acquisitions to continue throughout 2021. We have observed a 43% rise in buyer registrations in comparison to 2020. This continued increase comes as no surprise, with first-time buyers and experienced operators drawn to the market for long-term prospects and opportunities as buyers seek to acquire a lifestyle business and invest in a new future.

We anticipate a host of acquisitions from first-time buyers to reach completion in the remainder of Q3 and continue to make their positive presence felt on the market throughout Q4.

With more than 30 years of experience in brokering the sale of mid-market SME's, we have completed more than 1,000 transactions in the last five years. We offer our clients bespoke corporate sales packages that are tailored to meet their individual sale goals.

If you are considering selling your business and wish to speak to us regarding a no-obligation business sale consultation, please call us on 01772 775 776