FTB numbers up 7.9% in April despite uncertainty

There were 27,370 new first-time buyer (FTBs) mortgage completion in April 2019, 7.9 per cent more than in the same month in 2018, suggesting that prospective homeowners are displaying resilience despite uncertainty.

According to data published by UK Finance, homemovers demonstrated a similar level of resilience, with 25,450 mortgages completed in the month, 6.4 per cent more than in April 2018.

Furthermore, there were 18,920 new remortgages with additional borrowing in April 2019, 0.3 per cent more than in the same month in 2018, highlighting that homeowners continue to take advantage of the low interest rate environment.

For these remortgages, the average amount taken out in April was £54,000. Additionally, 19,140 were simple pound-for-pound remortgages (with no additional borrowing), 6.2 per cent fewer than in April 2018. In total, there were 3.1 per cent less residential remortgages in April 2019 than in the same month a year earlier.

Despite recent buy-to-let (BTL) numbers dwindling, the figure remained the same in April 2019 as it was in April 2018. There were 5,100 new BTL house purchase mortgages completed and 14,400 remortgages in the sector, also the same as last year.

Commenting on the figures, more 2 life CEO Dave Harris said: “With the number of first-time buyers rising, it’s clear that this pool of borrowers continues to reap the benefits of government initiatives such as Help-to-Buy.

“However, whilst this may be a viable solution for some, others may need a little extra help to get onto the property ladder. This is where we are seeing increasing numbers of parents and grandparents stepping in and ‘gifting’ their property wealth to their younger relatives.”

Addressing the remortgaging sector, TMA Club director of mortgages David Copland added: “Remortgages continue their upward trajectory as many customers lock in attractive rates now. For borrowers who haven’t yet reached the end of their terms, there is a huge opportunity for advisers. Recent data from Barclays shows there’s a staggering £90.2bn worth of resi-mortgages and almost £8.3bn worth of Buy-to-Let deals coming to the end of their terms between June and October this year.

“Advisers should be tapping into this area of the market sooner rather than later, engaging with those clients and reviewing their circumstances to ensure they’re on the most cost-effective product for them. There’s no reason why, with the hard work that advisers put in, today’s promising remortgage numbers can’t continue for the foreseeable future.”

Speaking of the resilience that homemovers and FTBS are displaying, Bluestone Mortgages director of sales and marketing Steve Seal noted: “The ongoing uncertainty we are reading in the headlines is not deterring borrowers from getting on with their plans, as mortgage approvals continue rising. However, not all borrowers are experiencing the same level of growth, particularly ‘complex’ customers.

Suggesting that high street lenders may not be the most appropriate credit source for some buyers, Seal added: "Those with credit blips are a growing pool struggling to access lending via traditional means.

"Borrowers whose credit scores have taken a hit may find that the high street isn’t the best, nor the most supportive source of lending – but there are alternatives available. Our research found only 10% of brokers felt mainstream lenders have become more understanding towards non-standard borrowers. Specialist lenders, however, can specifically cater to these types of customers.

"Ultimately though, the industry needs to provide better guidance to these borrowers, showing them where else they can access affordable lending if they are initially turned away."

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