First-time Buyers

First-time buyers hit highest level since 2006

Christina Hoghton
Written By:
Christina Hoghton

First-time buyer lending is up to its highest level in 12 years but home movers are being more cautious

First-time buyer mortgage completions hit their highest level since 2006, with a year-on-year increase of 1.9% in 2018, data from UK Finance showed.

There were 370,000 new first-time buyer mortgages completed in 2018, compared to 402,800 in 2006, with new lending up by 4.9% compared to 2017, standing at £62bn.

There were 30,900 new first-time buyer mortgages completed in December 2018, some 1.6% more than in the same month a year earlier. The £5.2bn of new lending in the month was 4% more year-on-year.

However, analysis by the Office for National Statistics (ONS) showed the average age of first-time buyers had risen eight years over the last two decades.

This it said was driven by soaring house prices, with tighter lending controls also having an impact.

Homemover down, remortgages up

The data also showed the continued pattern of increasing remortgages and fewer homemovers.

In 2018, there were 367,800 new homemover mortgages completed, some 1.9 per cent less than in 2017. The £80bn of new lending in the year was the same as in 2017.

December saw 30,000 new homemover mortgages completed, around 1.3 per cent fewer than in the same month a year earlier with the £6.5bn of new lending in the month the same year-on-year.

In contrast, 476,900 new homeowner remortgages were completed in 2018, up 10.8 per cent over 2017, while the £85bn of new lending in the year was 13 per cent more than in 2017.

There were 34,000 new homeowner remortgages completed in December, 9.3 per cent more than in the same month a year earlier. The £6.1bn of remortgaging in the month was 13% more year-on-year.

BTL home purchase mortgages

Buy-to-let mortgages followed a similar pattern with purchases down over the year and remortgaging significantly up.

In 2018, there were 66,400 new buy-to-let home purchases completed, 11.5% less than in 2017 and the £9bn of new lending was 15% down on 2017.

There were 5,100 new buy-to-let home purchase mortgages completed in December, also 5.6% fewer than in the same month a year earlier worth £0.7bn – down 12.5% on a year-on-year.

Again remortgaging soared in the buy-to-let sector in 2018, with 169,100 new buy-to-let remortgages completed, some 11.2% more than in 2017. The £27bn of new lending in the year was also 11.6% more than in 2017.

There were 12,400 new buy-to-let remortgages completed in December 2018, some 25.3% more than in the same month a year earlier.
By value this was £2bn of lending in the month, 25% more year-on-year.

Mortgage market continues to show resilience

Jackie Bennett, director of mortgages at UK Finance (pictured), said the mortgage industry helped 370,000 people buy their first home in 2018, the highest number in twelve years, as competitive deals and government schemes such as Help to Buy continued to boost the market.

She added: “Homeowner remortgaging also saw strong growth driven by customers locking into attractive rates, a trend we expect to continue in 2019 as more fixed-rate mortgages come to an end.

“Demand for new buy-to-let purchases continues to be dampened by recent tax and regulatory changes. However, the number of buy-to-let remortgages reached a record high of almost 170,000 last year, suggesting many landlords remain committed to the market.”

Kevin Roberts, director of Legal and General Mortgage Club, said the mortgage market continues to demonstrate its resilience with strong activity across most areas of the market.

“The number of mortgage products available are at some of the highest levels we’ve ever seen and combined with competitive rates, this is continuing to entice borrowers, particularly first-time buyers.

“For any borrowers unsure of how the current climate will affect them or how they can take potentially take advantage of it, speaking to a mortgage adviser is a great place to start.

“Through their extensive knowledge and access to the whole of market, these experienced professionals will be able to match a borrower’s unique circumstances with the right mortgage product.”