First-time buyer mortgage completions fell in 12 months to March 2019

The number of first-time buyer mortgages completed has fallen for the first-time since September 2018 and the buy-to-let lending market is continuing to contract, the latest industry figures show.

There were 28,800 new first-time buyer mortgages completed in March 2019, down 2.4% year on year and the first fall in eight months, according to the data from industry body UK Finance.

The data also shows that there were 25,280 home mover mortgages completed in the month, down 6% compared with the same month last year but there was a 4.1% rise in remortgages, the 12-month on a row of growth in this sector.

But the buy-to-let market continues to slow. There were 5,000 new buy-to-let home purchase mortgages, down 9.1% year on year. However, buy-to-let remortgages increased, up 3.9%, the second month in a row of growth.

According to Dilpreet Bhagrath, mortgage expert at Trussle, more needs to be done to make mortgages fairer and less of a hassle.

Bhagrath said:

‘Getting a mortgage is often one of the biggest financial and emotional commitments a person will make in their lives, and ensuring the Government and the industry is supporting young people as they take this step is crucial.’

The downward trend in buy-to-let lending is unlikely to change any time soon, according to Simon Heawood, chief executive officer of Bricklane.

Heawood said:

‘A swathe of tax penalties in recent years means more and more part-time landlords are deciding that buy-to-let just isn’t worth their while.

‘The upcoming tenant fees ban also appears to be the opening salvo in a push to professionalise the rental market. Those who remain can expect to face increased costs and hassle.

‘While individual buy-to-let is less and less viable, investors remain enthusiastic about residential property as an asset class, particularly with low interest rates and stock market turbulence. We expect to see increasing demand for options that provide a tax-efficient, hassle-free alternative to buy-to-let.’

Adrian Moloney, sales director at OneSavings Bank, believes that Brexit is a drag on housing market activity, and the buy-to-let market is no exception.

Moloney said:

‘Political and economic uncertainty is accentuating the structural changes we have seen in the buy-to-let space, and many landlords are sitting on their hands ahead of making long term investment decisions.

‘Whether more will be tempted into purchase decisions by falling house prices remains to be seen; for committed landlords with capital, falling house prices in London and the South East could provide a buying opportunity, with higher yields, in spite of the uncertain political backdrop.

‘Nonetheless, remortgaging continues to be the key source of activity, as landlords seek to protect their margins in the face of higher taxation and running costs, locking into the financial security of longer-term fixed rates.’

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