Mortgages Direct reveals return of FTBs
According to the research, FTB levels are at 46 per cent in February from 45 per cent in January.
However, the number of buyers taking an interest only mortgage is at its highest since the survey began, with 32 per cent of buyers opting for interest only mortgages in February from 25 per cent in January.
Peter Gladdy, director of Mortgages Direct, commented: “The high level of first time buyers indicates that confidence has returned after a short period of wild speculation that a housing market crash is imminent. However after a decade of strong house price growth and interest rates rising in the last two years, buyers are struggling not only to afford to buy a home but also repay their mortgages and as a result, more borrowers are opting for interest only mortgages instead.
“However this trend is worrying and not advisable unless a comprehensive repayment method is in place.”
The survey also reveals that demand for two-year fixed rate mortgages has soared in the past year with 64 per cent of borrowers opting for a fixed rate mortgage from 45 per cent this time last year.
Peter Gladdy commented: “The increase in borrowers opting for fixed rate mortgages indicates that borrowers are now incredibly rate sensitive. They are opting for the lowest deal available and two year fixed rates have been among the most competitive.”