January spike in first-time buyer applications

January spike in first-time buyer applications

Yorkshire Building Society is the latest lender to report a spike of interest from first-time buyers in January of this year, despite the end of a government scheme to encourage higher loan to value mortgages.

The lender saw a 91 per cent year-on-year increase in first-time buyers seeking a 95 per cent loan-to-value (LTV) mortgage from January 2016 to January 2017.

This was despite the end of the government's Help-to-Buy mortgage guarantee scheme in December.

The figures follow similar data from Connells Survey & Valuation, which showed that first-time buyer valuations rose by 21 per cent year-on-year in January.

First-time buyers are now responsible for a third of activity at Connells, up from a quarter at the start of 2016.

Charles Mungroo, mortgage manager at Yorkshire Building Society, said that there was no slowing in demand for mortgages for those with five per cent deposits. 

“It’s positive to see that borrowers realise there are still options available across the market to those with smaller deposits despite the disappearance of the Help to Buy mortgage guarantee scheme," he said.

Chancellor Philip Hammond announced in September that the Help-to-Buy Scheme, which encouraged lenders to offer loans to homebuyers with smaller deposits, would close in December.

 The chancellor said that the scheme had a “specific purpose that has now been successfully achieved”, adding that 30 lenders now offered their own 90-95 per cent mortgage schemes.

Monday (13 February) marked the beginning of First Time Buyers Fortnight, a campaign that encourages people to get onto the housing ladder.