First-time buyer market continues to grow: UK Finance

First-time buyer figures increased by 4.1% in the year to February, while buy-to-let purchases continue to fall.

Rozi Jones
17th April 2019
help to buy young couple ftb first time buyers moving
"The retreat of landlords from the market is producing more opportunities for first-time buyers, as the government intended."

First-time buyer numbers have seen annual growth for the fifth consecutive month, according to the latest data from UK Finance.

There were 24,880 new first-time buyer mortgages completed in February 2019, 4.1% more than in the same month in 2018.

Homemover figures remained steady with a 0.1% annual rise, while remortgages with additional borrowing increased by 10% compared to February 2018. Additionally, there were 18,360 pound-for-pound remortgages, 7.8% more than in the same period last year.

Buy-to-let figures continued to fall, with 4,800 new purchase mortgages completed in February, 7.7% fewer than in the same month in 2018.

There were 14,400 remortgages in the buy-to-let sector, 2.1% more than in the same period last year. While buy-to-let house purchases continue to contract due to tax and regulatory changes, buy-to-let remortgaging has increased as borrowers move from fixed rate mortages and lock into new attractive rates.

Andrew Montlake, director of Coreco, commented: “With delay after delay, and indicative vote after indicative vote, a growing number of people are saying to hell with Brexit and are getting on with their lives.

“There’s a significant amount of pent-up demand out there and it’s now really starting to come through.

“This is especially the case with first-time buyers, who sense the current uncertainty is a massive window of opportunity to get on the ladder.

“Not only are house prices more attractive than they have been for a number of years, but first-time buyers are being accommodated by Help to Buy, competitive mortgage rates and reduced competition from amateur landlords following recent tax changes.

“Over the past month or two, we've seen a marked pick-up in mortgage enquiries as people give up on Brexit and make their move.”

Richard Pike, sales and marketing director at Phoebus Software, said: “The mortgage market is managing to keep ahead compared to 2018 in most areas and, when you consider that these figures only tell part of the lending story in the UK, that is encouraging. Buy-to-let purchases continue to struggle but that, like many areas that require an element of investor risk, could be being affected by continued Brexit uncertainty.

“It is difficult to overstate the impact that the current negotiations between Westminter and Europe are having on the UK as a whole. We have been in a state of limbo since Article 50 was triggered and there is still no sign of a solution. This is, of course, having a knock-on effect and it is highly likely that the figures we will see in the coming months, which reflect the run-up to the original withdrawal deadline, will be more subdued.”

Tomer Aboody, director of MT Finance, added: "It is no surprise that buy-to-let numbers are extremely low with just under 5,000 new purchases in the month, considering the tax and regulatory changes which have hit the sector.

"The retreat of landlords from the market is producing more opportunities for first-time buyers, as the government intended. First-time buyers are borrowing more to get on the ladder but because credit is so cheap this isn’t necessarily a reckless move. With property prices softening and mortgage rates remaining low, it is a good time to buy."

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