Number of first-time buyers ‘at highest levels since June 2017’

First-time buyers are driving the housing market – with the number of mortgages handed out to this sector reaching its highest levels in over a year in August, lenders have reported.

There were 35,500 new first-time buyer mortgages completed in August, 2% more than in the same month a year earlier, trade association UK Finance said. It was the highest monthly total since June 2017.

Meanwhile, buy-to-let house purchases were down in August compared with a year earlier.

There were 6,000 new buy-to-let home purchase mortgages completed in August, 13% down on August 2017.

Experts said people taking their first step on the property ladder are benefiting from continued low interest rates, a good choice of mortgages and government policies aimed at giving the sector a helping hand.

A stamp duty cut was introduced for first-time buyers in 2017.

First-time buyers and people purchasing buy-to-let properties often target the same type of home.

But landlords have seen a stamp duty hike, as well as other tax changes which have eaten into their profits.

Property website Rightmove said this week that less buy-to-let investor activity is giving first-time buyers an opportunity to negotiate deals this autumn.

Rightmove has seen a softening in asking prices for properties with two bedrooms or fewer – the usual target market for both affordability-stretched first-time buyers and buy-to-let investors.

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.”

She said that while home purchases in the buy-to-let market continue to be impacted by recent tax changes, re-mortgaging levels in the sector suggest “many existing landlords remain committed to the market”.

Andrew Montlake, director at Coreco mortgage brokers said: “It is great to see the return of first-time buyers who are considered the lifeblood of the housing market.

“Although there are still issues around raising a deposit for many without help from the ‘bank of mum and dad’, first-time buyers generally are benefiting from low interest rates and more choice in the mortgage market, as well as schemes such as Help to Buy.

“It could also be argued that these buyers have also been buoyed by recent government policies at the expense of buy-to-let landlords, many of whom have reduced their activity due to tax changes.”

Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “Lenders continue to offer competitively-priced high loan-to-value products to attract (first-time buyers) and with property prices softening in some areas, there are good opportunities for those trying to get on the ladder for the first time.”