Number of first-time buyers reached 12-year high in 2018

The number of first-time buyers buying their first home reached a 12 year high in the UK in 2018 with 370,000 getting a mortgage for the first time, the latest industry figures show.

Overall the number increased by 1.9% compared with 2017, the highest number of first-time buyer mortgages since 2006 and the £62 billion of new lending in 2018 was 4.9% up year on year, according to the trends update report from UK Finance.

There were 30,900 new first-time buyer mortgages completed in December 2018, up 1.6% compared with the same month a year earlier and the £5.2 billion of new lending in the month was 4% higher.

The data also shows that there were 30,000 new home mover mortgages completed in December 2018, down 1.3% compared to the same month a year earlier. The £6.5 billion of new lending in the month was the same year on year.

In 2018, there were 367,800 new home mover mortgages completed, some 1.9% less than in 2017 and the £80 billion of new lending in the year was the same as in 2017.

There were 34,000 new home owner remortgages completed in December 2018, some 9.3% more than in the same month a year earlier and he £6.1 billion of remortgaging in the month was 13% more year on year.

In 2018, there were 476,900 new home owner remortgages completed, some 10.8% more than in 2017 and the £85 billion of new lending in the year was 13% more than in 2017.

There were 5,100 new buy-to-let mortgages completed in December 2018, down 5.6% than in the same month a year earlier. By value this was £0.7 billion of lending in the month, some 12.5% down year on year. In 2018, there were 66,400 new buy-to-let home purchases completed, 11.5% less than in 2017. The £9 billion of new lending in the year was 15% less than in 2017.

But with 12,400 new buy-to-let remortgages completed in December 2018, there was a rise of 25.3% compared to the same month a year earlier. By value this was £2 billion of lending in the month, 25% more year on year.

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

According to Jackie Bennett, director of mortgages at UK Finance, the rise in first time buyers was helped by competitive deals and Government schemes such as Help to Buy continue to boost the market.

Jackie Bennett explained:

‘Home owner 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.’

Kevin Roberts, director of the Legal & General Mortgage Club, the number of mortgage products available are at some of the highest levels ever seen and combined with competitive rates, this is continuing to entice borrowers, particularly first-time buyers.

The rise in first time buyers is not a surprise, according to John Phillips, operations director at Just Mortgages and Spicerhaart.

John Phillips said:

‘We have been seeing the same trend for many months now as incentives like Help to Buy and the freeze on stamp duty, plus new mortgages are making it easier for them to make that first move onto the housing ladder.

‘We are also seeing remortgaging remains strong as people take advantage of the low rates we are still enjoying, and if they remain low, there is no reason why this won’t continue. I also think we are increasingly seeing people choosing to remortgage to free up cash to do work to their current homes rather than move, either because the stamp duty and other costs make it too expensive, or because they are unwilling to take the risk in an uncertain market.

‘I think we will see this trend continue into 2019. Remortgaging equity release and first-time buyer purchases will remain strong while purchase will remain flat. But post March 29 I think there will be a change in sentiment. No matter what the outcome, uncertainly will be taken out of the equation, and as a result, I think the purchase market will start to pick up. But overall, we will probably not see the effects of that until much later on in the year.’

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