Number of first-time buyer mortgages at 12-year high

Michael Lloyd

February 19, 2019

There were 370,000 new first-time buyer mortgages completed in 2018, some 1.9% more than in 2017 and the highest number of first-time buyer mortgages since 2006.

UK Finance’s Mortgage Trends Update found the £62bn of new lending in the year was 4.9% more than in 2017.

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

Jackie Bennett, director of mortgages at UK Finance 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 continue to boost the market.

“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.”

Mark Harris, chief executive of mortgage broker SPF Private Clients, added: “First-time buyers are essential to the overall health of the housing market.

“The fact that their numbers are at a 12-year high, despite the well documented difficulties first-time buyers face in drumming up a deposit and being able to afford a mortgage, makes this all the more remarkable.

“The availability of high loan-to-value deals and the Help to Buy scheme have helped, while the Bank of Mum and Dad is being called upon more than ever.

“Remortgaging numbers continue to be strong as borrowers lock into fixed rates for some certainty during these tricky Brexit times. Lenders remain keen to lend and the competitive rates we have seen for a while now look unlikely to disappear anytime soon.

“Experienced landlords remain committed to buy-to-let. There are fewer novice investors entering the sector but this is no surprise given the trickier tax and regulatory environment.”

There were 30,000 new homemover mortgages completed in December 2018, some 1.3% fewer than in the same month a year earlier. The £6.5bn of new lending in the month was the same year-on-year.

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

There were 34,000 new homeowner remortgages completed in December 2018, some 9.3% more than in the same month a year earlier.

The £6.1bn of remortgaging in the month was 13% more year-on-year. In 2018, there were 476,900 new homeowner remortgages completed, 10.8% more than in 2017. The £85bn of new lending in the year was 13% more than in 2017.

There were 5,100 new buy-to-let home purchase mortgages completed in December 2018, 5.6% fewer than in the same month a year earlier.

By value this was £0.7bn of lending in the month, 12.5% down year-on-year. In 2018, there were 66,400 new buy-to-let home purchases completed, some 11.5% less than in 2017. The £9bn of new lending in the year was 15% less than in 2017.

There were 12,400 new buy-to-let remortgages completed in December 2018, 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.

In 2018, there were 169,100 new buy-to-let remortgages completed, 11.2% more than in 2017. The £27bn of new lending in the year was 11.6% more than in 2017.

Jeremy Leaf, north London estate agent and a former RICS residential chairman, said: “In welcome news, first-time buyers are taking advantage of reduced competition for smaller properties from buy-to-let landlords still reeling from recent tax and regulatory changes.

“First-time buyers are the lifeblood for the market as they tend to move up the housing ladder, releasing chains, compared with landlords who usually buy at the lower levels and stay there.

“Although affordability and activity has generally improved over the past month there will probably be more green shoots in the garden than the housing market until uncertainty over Brexit begins to clear.”

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