First-time buyer mortgages on the rise, reveal UK Finance figures


First-time buyers helped to give the housing market a sense of momentum towards the end of 2018, new figures from UK Finance have revealed.

November saw 36,200 mortgages completed for first-time buyers (FTBs), a rise of 5.8% on the same month a year earlier. The £6 billion of new lending to FTBs in the month was an increase of 9% year-on-year, with stamp duty relief and the Help To Buy scheme helping to encourage those taking their first steps on the property ladder.

Stamp duty relief and Help To Buy make an effect

FTBs took advantage of the end of stamp duty on properties up to £300,000, a measure announced in the Budget of 2017.  Chancellor Philip Hammond followed this in October 2018 by revealing that this relief will be extended to all FTBs on shared ownership properties valued up to half a million pounds. The numbers of FTBs was also recently shown to be back to pre-financial crisis levels by the Yorkshire Building Society.

The recent Budget also extended another measure that has helped FTBs get started, namely the Help To Buy scheme. This offers a government-backed loan worth 20%, providing the buyers can provide a 5% deposit on a new-build home. The Ministry of Housing, Communities and Local Government (MHCLG) revealed that 88% of Help To Buy-backed completions were by FTBs, and Mr Hammond has announced that the scheme will extend until 2023.

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.”

There were 39,600 new homeowner remortgages in November, a 1.3% rise compared to the same month in 2017. The £6.8bn of remortgaging in the month was the same year-on-year.

In the rental market, UK Finance’s findings reveal a quieter picture. The 6,100 new buy-to-let mortgages are 9% down on the previous year, while the 15,100 buy-to-let remortgages were a 9.5% increase.

FTB market in a good place

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.”

“These figures show Brexit uncertainty hasn’t prevented first-time buyers from grasping the opportunity to step foot on the housing ladder,” Dilpreet Bhagrath, Mortgage Expert at Trussle. “The reality is that there are good deals to be had and many first-time buyers are taking advantages of schemes such as Help to Buy.”

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