First-time buyer activity strongest in over a year: UKF

Data from UK Finance shows that the number of first-time buyer mortgages completed in August was the highest since June 2017.

During the summer month, 35,500 new FTB mortgages were completed, a rise of 2 per cent on a yearly basis, with a value of £6.1bn, an increase of 5.2 per cent over the same time frame.

However, UK Finance’s data also shows that remortgage activity, which has lately dominated the mortgage market to the extent that July was the strongest in this area in a decade, softened in August across most categories.

In total, 38,000 home movers remortgaged, a drop of 2.3 per cent on an annual basis, although the £8.5bn in value was the same over the same time period.

In terms of homeowners, 37,100 remortgages were taken out, a yearly drop of 0.3 per cent. Again, the value was the same, at £6.5bn.

Remortgage activity in the buy-to-let category was up, however, with yearly growth of 4.5 per cent, with a value increase of 4.8 per cent, coming in at £2.2bn.

Further data shows that, in contrast, BTL purchases fell to 6,000 in August, a 13 per cent decrease on a yearly basis, and a 20 per cent drop in value, at £0.8bn.

PRIMIS and PTFS proposition director Vikki Jefferies says: “At first glance these results appear to paint an increasingly positive picture of the market, particularly with FTBs reaching its highest level since June 2017. What we must remember though, is that a large proportion of this increased activity is still based on the steady remortgage market, rather than new buyers, as existing borrowers move to protect themselves from potential rate rises.”

Cashbackremortgages.co.uk founder Suchit Sethi adds: “While it is heartening to see a rise in FTBs getting onto the housing ladder, it doesn’t mask the reality that the market is stagnating further up. It cannot be argued that uncertainty surrounding Brexit will only make things worse, not better.

“The BTL market continues its alarming fall from grace, thanks to the government’s punitive tax changes. However, the fact that we’ve seen an increase in remortgaging from existing landlords suggests they may well be in it for the long haul.”

Bluestone Mortgages director of sales and marketing Steve Seal says: “With first-time buyer activity up, it is encouraging to see that more borrowers are taking advantage of what the market has to offer. After all, with the Bank of England’s latest rate hike, these rates won’t be around forever.”

TMA director of mortgage services David Copland adds: “Despite the increase in FTB activity, a large proportion of increased lending is still resting on remortgaging activity and advisers are doing a sterling job of locking customers into the best possible rates. Today’s current low rates won’t last forever, particularly with the economic uncertainty of Brexit just around the corner, so we always advise acting sooner rather than later.”

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