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First-time buyer numbers rise for fifth consecutive month in February

Written by: Antonia Di Lorenzo
But fewer landlords are buying property as the tax and regulatory changes make investing less attractive
First-time buyer numbers rise for fifth consecutive month in February

The number of first-time buyer mortgages completed rose for the fifth month in a row in February 2019, data showed.

There were 24,880 new first-time buyer mortgages completed in February, 4.1% more than in the same month in 2018, according to the latest figures released by financial trade body UK Finance.

Around 23,660 homemover mortgages were completed in the month, 0.1% more year-on-year.

The report showed that there were 18,200 new remortgages with additional borrowing in February 2019, 10 per cent more than in the same month in 2018.
For these remortgages, the average amount taken out in February was £52,000. Additionally, there were 18,360 pound-for-pound remortgages, 7.8% more than in the same period last year.

The average loan to value ratio in the remortgaging market was 57 per cent while the average loan-to-income ratio was 2.74.

Buy-to-let purchase mortgages dip

The number of new buy-to-let home purchase mortgages completed in February fell by 7.7% from the same month in 2018, standing at 4,800.
There were 14,400 remortgages in the buy-to-let sector, 2.1 per cent more than in the same period last year.

While buy-to-let house purchases continue to contract due to tax and regulatory changes, buy-to-let remortgaging has increased as borrowers move from fixed rate mortgages and lock into new attractive rates.

First-time buyers being accommodated by Help to Buy

Andrew Montlake, director of Coreco, said that with delay after delay, and indicative vote after indicative vote, a growing number of people are saying to hell with Brexit and are getting on with their lives.

“There’s a significant amount of pent-up demand out there and it’s now really starting to come through. This is especially the case with first-time buyers, who sense the current uncertainty is a massive window of opportunity to get on the ladder.

“Not only are house prices more attractive than they have been for a number of years, but first-time buyers are being accommodated by Help to Buy, competitive mortgage rates and reduced competition from amateur landlords following recent tax changes.

“Remortgages are the other area of strength in the lending sector, which is no surprise given some of the competitive products and rates available as lenders compete for market share.

“Over the past month or two, we’ve seen a marked pick-up in mortgage enquiries as people give up on Brexit and make their move.”

Landlords taking advantage of cheaper rates

Tomer Aboody, director of property lender MT Finance, said that it is no surprise that buy-to-let numbers are extremely low with just under 5,000 new purchases in the month, considering the tax and regulatory changes which have hit the sector.

He added: “Landlords are taking advantage of cheaper rates on buy-to-let loans and remortgaging while looking at the commercial space to make further investments where regulations are softer. With news of further tenant protections being introduced with regard to evictions, landlords are uneasy and increasingly uncomfortable with traditional buy-to-let.

“The retreat of landlords from the market is producing more opportunities for first-time buyers, as the government intended. First-time buyers are borrowing more to get on the ladder but because credit is so cheap this isn’t necessarily a reckless move. With property prices softening and mortgage rates remaining low, it is a good time to buy.”

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