March saw the first year-on-year decrease in first-time buyers since September 2018, the UK Finance Mortgage Trends Update has found.
The report also revealed that remortgage business continued to see growth which has been seen consecutively for 12 months.
There were 28,800 new first-time buyer mortgages completed in March 2019 which 2.4% fewer than in the same month in 2018.
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “The decrease in number of first-time buyers after continuous growth over the past six months is a concern, and let’s hope it is just a blip in the numbers.
“First-time buyers are so important for the overall health of the housing market, ensuring transactions further up the chain can happen.”
March saw 16,810 new remortgages with additional borrowing which 9.1% more than in the same month in 2018.
Harris continued: “Remortgaging goes from strength to strength as borrowers come to the end of fixed-rate deals and quickly hop over onto another competitive rate. There is so much uncertainty out there, and mortgage rates are so cheap, why wouldn’t you?”
For new remortgages, the average amount taken out in March 2019 was £55,700.
Additionally, 15,030 were simple pound-for-pound remortgages with no additional borrowing which is a 1.1% decline from March 2018.
The number of residential remortgages saw a 4.1% year-on-year increase, which comes as a number of fixed-rate deals come to an end as borrowers continue to lock into attractive rates.
Andrew Montlake, director of the UK-wide mortgage broker, Coreco, added: “With rates nearing rock-bottom given the intensity of competition among lenders, remortgages have gone off the Richter Scale.
“The 9.1% rise in additional borrowing remortgages compared to a year ago reflects the fact that a lot of people are choosing to add value to their existing homes rather than move.
“While homemover mortgages were down in March, purchases have really started to gain momentum since April, with the usual late Spring lift being boosted by a growing indifference to Brexit.
“While there was a slight decrease in first-time buyer mortgages, they are still generating most of the momentum in the purchase market.
“We are also now seeing more activity further up the property ladder, as people’s lives have been on hold for long enough.
“The window shoppers of 2018 now have their wallets out and are making genuine offers.”
Gareth Lewis, commercial director of property lender MT Finance, said: “Purchases are down, which is no surprise, as many people are still putting decisions on hold.
“Remortgaging is up as those who bought before stamp duty hikes were introduced in 2016 are now remortgaging their fixed rates onto another competitive deal.”
There were 25,280 homemover mortgages completed in the month which is 6% year-on-year decline, whilst buy-to-let home purchase mortgages also saw a 9.1% decline from March 2018.
There were 14,400 remortgages in the buy-to-let sector which 3.9% more than in the same period last year.
While buy-to-let house purchase activity continues to contract due to tax and regulatory changes, buy-to-let remortgaging has increased year-on year for the second month in a row.
Harris added: “Buy-to-let remortgaging is also strong as landlords make the most of their portfolios and ensure they maximise as much profit as possible.
“The number of landlords adding to their portfolios, or investing for the first time, has inevitably fallen again due to the tough tax and regulatory changes which have hit the sector.”
Jeremy Leaf, north London estate agent and a former RICS residential chairman, said: “It is no surprise either that buy-to-let mortgages are continuing their downwards trend as landlords face an onslaught of tax and regulatory changes with more on the way.
“We are finding buy-to-let remortgaging increasing is down to properties having to work harder in order to maintain profit levels so this is likely to continue.”