First-time buyers take advantage of schemes despite Brexit uncertainty

Written by Oliver Wade
17/01/2019

There were 36,200 new first-time buyer mortgages completed in November 2018, some 5.8% more than in the same month a year earlier, new figures from UK Finance revealed.

In the month, the £6bn of new lending illustrated a 9.1% increase year-on-year, with the average first-time buyer being aged 30 and possessing a gross household income of £42,000.

However, there was also an increase in the number of new homemover mortgages completed in November, rising by 1.1% to 36,200. The £7.8bn of new lending in the month represents a 4% increase year-on-year, with the average homemover being 39 and a gross household income of £55,000.

Furthermore, the month experienced positive growth in the remortgage sector, with 39,600 completed, some 1.3% more than in November 2017. Despite marginal growth, the £6.8bn of remortgaging in the month remained the same year-on-year.

However, the buy-to-let mortgage market continued to suffer as there were just 6,100 new mortgages completed in November 2018, a 9% decrease on the number recording a year earlier. By value the £800m of new lending in the month was 11.1% down year-on-year.

There were 15,000 new buy-to-let remortgages completed in the month, some 9.5% more than in the same month a year earlier. By value this was £2.4bn of lending in the month, 9.1% more year-on-year.

Commenting on the data, UK Finance director of mortgages Jackie Bennett 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.

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

Also commenting, Trussle mortgage expert Dilpreet Bhagrath: “These figures show Brexit uncertainty hasn’t prevented first-time buyers from grasping the opportunity to step foot on the housing ladder. 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.

“Meanwhile remortgaging has slowed, month-on-month, suggesting home owners have been adopting a ‘wait and see’ approach as we approached Brexit. However, it’s worth remembering these figures relate to November, well before uncertainty reached its recent peak - linked to recent votes in Parliament. Because of this, we expect to see another surge in remortgaging in the coming months, as many home owners look to lock in fixed deals to avoid any instability in their mortgage payments.”

Bluestone Mortgages director of sales and marketing Steve Seal added: “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.

“This is where specialist lenders fill the void, ensuring that customers who have been rejected from mainstream lenders are not barred from the mortgage market entirely. As we enter 2019, we hope to see more lenders accommodating the needs of all types of customers.”

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Adam Cadle talks to Vida Homeloans director of sales - mortgages Louisa Sedgwick about the specialist first time buyer and buy to let markets

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