Number of first-time buyers reached 12-year high in 2018, says UK Finance

The number of first-time buyers reached a 12-year high last year, mortgage lending figures from trade association UK Finance show.

Some 370,000 mortgages were handed out to people getting on the property ladder last year – 1.9% up on 2017.

Commenting on the figures, housing market experts said people are being helped to make the jump to home ownership by competitive mortgage deals, schemes aimed at first-time buyers and contributions from parents – also known as the bank of mum and dad.

The 2018 total marked the highest number of first-time buyer mortgages since 2006, when 402,800 loans were advanced.

The average first-time buyer is aged 30 and puts down a 17.8% deposit, according to UK Finance’s figures for December 2018.

Jackie Bennett, director of mortgages at UK Finance said: “The mortgage industry helped 370,000 people buy their first home in 2018, the highest number in 12 years, as competitive deals and Government schemes such as Help To Buy continue to boost the market.”

She said UK Finance also expects to see existing home owners locking into attractive re-mortgage rates in 2019 as more fixed-rate mortgage deals come to an end.

Ms Bennett continued: “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.”

Andrew Montlake, director at Coreco mortgage brokers, said first-time buyers are the “life-blood” of the property market.

He said: “Mortgage lenders are becoming more and more competitive in the first-time buyer market with more products available for borrowers with smaller deposits and a fair amount of innovation taking place, such as family deposit schemes.”

Mortgage rates
The so-called bank of mum and dad is being called upon more than ever (Joe Giddens/PA)

Mr Montlake continued: “The issue, however, remains the deposit itself rather than access to mortgage finance, with those lucky enough to have parental assistance able to take advantage of these products whilst those who don’t still struggle to save the required deposit levels.

“What we all want to see is a healthy property market with more truly affordable properties, realistic prices and more transactions.”

Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “First-time buyers are essential to the overall health of the housing market.

“The fact that their numbers are at a 12-year high, despite the well-documented difficulties first-time buyers face in drumming up a deposit and being able to afford a mortgage, makes this all the more remarkable.

“The availability of high loan-to-value deals and the Help To Buy scheme have helped, while the bank of mum and dad is being called upon more than ever.”

Jeremy Leaf, a north London estate agent and a former residential chairman of the Royal Institution of Chartered Surveyors (Rics), said: “First-time buyers are taking advantage of reduced competition for smaller properties from buy-to-let landlords still reeling from recent tax and regulatory changes.”

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