First-time Buyer  

Mortgage market bolstered by first-time buyers

Mortgage market bolstered by first-time buyers

First-time buyers and remortgages continued to drive the UK housing market towards the end of 2018, as homeowners benefitted from competitive deals and housing schemes.  

More than 35,000 new first-time buyer mortgages completed in November 2018, up 5.8 per cent when compared with the same month in 2017 and at a value of £6bn, according to UK Finance’s November Trends update.

The data showed the average age of a first-time buyer was 30 years with a gross household income of £42,000.

Meanwhile, October was a record month for remortgages, reaching its highest level in a decade, according to UK Finance.

Almost 40,000 remortgages were completed, representing a rise of 1.3 per cent when compared with the previous year.

The value, however, remained flat year-on-year at £6.8bn.

Jackie Bennett, director of mortgages at UK Finance said: "A mixture of competitive deals and schemes including Help to Buy saw even more first-time buyers get a foot on the housing ladder during November.

"Meanwhile, homeowner remortgaging activity has steadied, after reaching its highest level in a decade the previous month as a large number of fixed-rate deals came to an end."

But Steve Seal, director of sales & marketing at Bluestone Mortgages, said: "Whilst it’s promising to see an increase in remortgage and first-time buyer activity, not all buyers are experiencing the same level of growth – particularly borrowers with complex financial backgrounds.

"Self-employed workers, contractors, freelancers or those with credit blips are all growing pools of borrowers struggling to access lending via traditional means."

He added: "As we enter 2019, we hope to see more lenders accommodating the needs of all types of customers."

UK Finance also found the buy-to-let market had seen 9 per cent fewer new home purchase mortgages in November 2018 than it did a year earlier, while remortgages in this sector increased by 9.5 per cent. 

Bennett added: "In the buy-to-let market new home purchases remain subdued, while remortgaging continues to grow as landlords lock into attractive rates."

Matt Andrews, managing director of mortgages at Masthaven, said: "The first-time buyer market continues to remain strong thanks to stamp duty relief and government initiatives such as Help to Buy.

"This trend should only continue throughout this year, following the extension of the equity loan element until 2023.

"The withdrawal of Help to Buy ISAs, however, will affect this segment of buyers, so it’ll be interesting to see how these figures play out."