Our research found the market to be in good health in the run-up to the Brexit vote – but has all that changed?
A major hiccup with the Help to Buy Isa scheme caused policymakers some embarrassment over the summer. Designed to provide first-time buyers’ savings with a 25 per cent top-up, the scheme was causing widespread frustration because buyers were unable to use the bonus as part of their deposit.
The Government has now fixed this problem by allowing Help to Buy Isa savers to transfer, from April, into the new Lifetime Isa, which they can use when solicitors seek to secure exchange deposits.
This is just one of the highly publicised challenges first-time buyers have faced. However, recent research we conducted suggests the overall picture for those getting onto the housing ladder improved in the first half of 2016. Our Mortgage Market Tracker, which examines applicants’ journeys through the intermediary channel from enquiry to approval, shows that more first-timers saw their applications agreed in Q2 2016 than in Q1. Additionally, the proportion whose enquiries resulted in an agreement in principle increased from 51 per cent in Q1 to 57 per cent in Q2.
Our research also found the mortgage market was in good health in the run-up to the Brexit vote, with the percentage of dropouts due to lender rejections falling from 28 per cent in Q1 to 23 per cent in Q2.
The next quarter’s edition of the index will provide us with a clearer view of how the Brexit vote has affected the market. The initial signs have been mixed: the Council of Mortgage Lenders recorded the highest level of gross lending in August since 2007, based on completions coming through that month; but the British Bankers’ Association suggests new mortgage approvals are falling.
The question remains whether agreement-in-principle levels for first-time buyers continued to improve throughout the summer. It will also be interesting to see if the fall in base rate has lifted buyer confidence and enquiry levels.
Peter Williams is executive director of the Intermediary Mortgage Lenders Association