Competitive deals pushing up lending to first-time buyers in the UK

A mixture of competitive deals and schemes, including Help to Buy, has been helping more first-time buyers get onto the housing ladder in the UK, according to the latest mortgage lending figures.

There were 36,200 new first-time buyer mortgages completed in November 2018, up 5.8% from the same month in 2017 while the £6 billion of new lending was 9.1% higher year on year, the figures from the latest mortgage trends update report from UK Finance show.

There were also 36,200 new home mover mortgages completed in the month, up 1.1% year on year and in this sector the £7.8 billion of new lending was 4% more on an annual basis.

The figures also show that there were 39,600 new home owner remortgages completed, a rise of 1.3% compared with November 2017 the £6.8 billion of remortgaging in the month was unchanged year on year.

New buy to let lending continued to decline. There were 6,100 new-buy to let home purchase mortgages completed in the month, down 9% year on year and the £0.8 billion of lending in this sector was down 11.1% compared with November 2017.

However, there were 15,000 new-buy to let remortgages completed, a rise of 9.5% year on year by value this was £2.4 billion, up 9.1% on an annual basis.

Jackie Bennett, director of mortgages at UK Finance, said:

‘A mixture of competitive deals and schemes including Help to Buy saw even more first time buyers get a foot on the housing ladder during November.

‘Meanwhile, home owner remortgaging activity has steadied, after reaching its highest level in a decade the previous month as a large number of fixed-rate deals came to an end. In the buy to let market new home purchases remain subdued, while remortgaging continues to grow as landlords lock into attractive rates.’

But Steve Seal, director of sales and marketing at Bluestone Mortgages, pointed out that not all buyers are experiencing the same level of growth, particularly borrowers with complex financial backgrounds.

Steve Seal said:

‘Self-employed workers, contractors, freelancers or those with credit blips are all growing pools of borrowers struggling to access lending via traditional means,’ he said.

According to Adrian Moloney, sales director at OneSavings Bank, the figures point to resilience in the home lending sector, including in the buy to let market.

He said:

‘There is an understandable sense of caution from investors, no doubt influenced by the current political situation, which is arguably weighing on purchase decisions and compounding the effect of increasing tax costs.

‘Remortgaging is naturally dominating activity therefore, as investors take advantage of the low rates currently available to provide financial certainty and reduce their mortgage costs where they can.’

Kindly shared by Property Wire