Last year saw the highest number of first-time buyers (365,000) since 2006, a rise of 7.4% from 2016.
However UK Finance’s latest mortgage trends update found that in December 2017 there were 5.2% fewer buy-to-let mortgages completed year-on-year.
Mortgage lending for first-time buyers, homemovers and buy-to-let purchases all fell in December 2017 compared to the previous year.
Paul Smee, head of mortgages at UK Finance, said: “2017 saw the number of first-time buyers reach its highest level in a decade, which is welcome for those getting started on the housing ladder.
“But although the market remains competitive there is no room for complacency, with weaker December figures consistent with our market forecast of subdued growth this year.
“We are also seeing a less buoyant buy-to-let market, which continues to be impacted by recent tax and regulatory changes. This will continue to flatten gross lending volumes this year.”
James Cameron, director of estate agency Vesper Homes, said: “The uplift in first-time buyers seen last year comes as no surprise to estate agents as we have sold a number of flats to those getting on the ladder for the first time.
“When it comes properties costing less than £350,000 in London, once you take into account taxes, agent fees and mortgages it doesn’t make it economical for landlords to rent them as they just cover the cost.
“Landlords are therefore selling up so they can invest outside of London or trade up to a larger property which frees up the smaller ones for first-time buyers.”
The £5.1bn of first-time buyer lending in the month was 1.9% down year-on-year. The average first-time buyer was 30 and had an income of £41,000.
There were 30,700 homemover mortgages completed in December, some 4.7% fewer than in the same month a year earlier. The £6.5bn of lending in the month was 3% down year-on-year. The average home over was 39 and had an income of £55,000.
The £5.2bn of remortgaging in the month reflected an increase of 8.3% year-on-year. There were 5,300 buy-to-let house purchase mortgages completed in December, some 17.2% fewer than in the same month a year earlier. By value this was £0.8bn of lending in the month, 11.1% down year-on-year.
There were 9,900 buy-to-let remortgages completed in December, some 11.6% fewer than in the same month a year earlier. By value there was £1.6bn of lending in the month, 11.1% down year-on-year.
Jeremy Leaf, north London estate agent and a former RICS residential chairman, said: “These figures don’t tell the whole story.
“December results are notoriously difficult to use to identify a trend because of the peculiar nature of the festive season where people often put decisions on hold.
“What we do know is that this year has started fairly typically in that viewings and instructions are up although buyers are naturally nervous about making commitment until they see which way prices are moving.
“Encouragingly, first-time buyers are starting to replace investors at the smaller property end of the market which is good news because they buy at the bottom and trade up whereas investors tend to buy there and stay there.”