UK Finance: First-time buyer volumes reach highest level since June last year

Ryan Bembridge

October 16, 2018

There were 35,500 first-time buyer mortgages completed in August 2018, a 2% increase year-on-year and the most since June 2017, UK Finance figures show.

There was £6.1bn worth of first-time buyer business, a 5.2% rise year-on-year.

Jackie Bennett, director of mortgages at UK Finance, said: “Overall house purchase completions remain stable, driven largely by the number of first-time buyers which reached its highest monthly level since June 2017.”

Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “First-time buyers really are proving to be the lifeblood of the housing market, responsible for keeping the number of overall house purchase completions at a stable level.

“Lenders continue to offer competitively-priced high loan-to-value products to attract them and with property prices softening in some areas, there are good opportunities for those trying to get on the ladder for the first time.”

And John Philips, operations director of Just Mortgages and Spicerhaart, said: “We can see that it is first-time buyers that are boosting the whole sector.

“And while this is positive now, what happens when the help to buy scheme ends and stamp duty is brought back in?

“The government needs to be thinking about some more long term solutions otherwise the market is going to really slow down.

“I think a re-haul of stamp duty would certainly help, and I think we also need to see some incentives that encourage first time buyers to buy older homes too; this could really help move things along the chain.”

Buy-to-let remortgages also saw an increase, with 13,800 worth £2.2bn completed in the month, 4.5% and 4.8% more year-on-year.

Simon Heawood, chief executive of investment service Bricklane.com, said: “Buy-to-let landlords have been hit by a number of reasons to sell up their properties in recent years, from increasing taxation to stronger protections for tenants.

“This means as many as 44% of landlords are considering selling their properties, despite many remaining attracted to the residential property market itself.

“The good news, however, is that there are now alternatives through which investors can access residential property returns, but in ways that are tax-efficient, diversified and good for tenants, without the drawbacks of direct buy-to-let.”

However homemover mortgage and homemover remortgage volumes both fell, by 2.3% and 0.3% from August 2017.

Meanwhile there were just 6,000 mortgages for buy-to-let home purchase, a 13% reduction year-on-year.

David Copland, director of mortgage services at TMA, said: “The balance of the year looks set to continue – largely with a flat buy-to-let purchase market as this area remains less attractive to landlords due to the flurry of regulatory changes the sector has faced this year.

“This is coupled with a steady remortgaging market and a rise in product transfers, owing to the number of fixed rates reaching maturity and needing renewal over recent months.”

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