First-time buyer numbers highest since 2006: UK Finance

UK Finance reports that in the final month of December 2018, there were 30,900 first-time mortgages completed, bringing the total for 2018 to 370,000.

This, UK Finance says, at 1.9 per cent more than the number seen in 2017, is the highest number of FTBs entering the mortgage market since 2006, although it is some way off that year’s figure of 402,800.

In December, the value of new lending to FTBs was £5.2bn, bringing the yearly total to £61.6bn – a rise of 4.9 per cent.

Compared to December 2017, the number of FTBs was up 1.6 per cent and the value of their mortgages increased by 4 per cent.

Looking at homemovers, 30,000 completed mortgages in December made for a yearly total of 367,800, a drop of 1.9 per cent over the year before. The monthly completions value came to £6.5bn, with the yearly total of £80bn being unchanged.

In December 2017 there were 30,400 homemover mortgages recorded, with a value of £6.5bn.

Homeowner remortgage activity, meanwhile, came in at 34,000 completed in December 2018, at £6.1bn in value.

These numbers are significantly higher compared to those seen 12 months previous – 31,100 homeowner remortgages were completed in December 2017 totalling £5.4bn.

During the year there were 476,900 homeowner remortgages in total, worth £85bn – an increase on 2017’s numbers of 10.8 per cent and 13 per cent.

New buy-to-let loans in December 2018 totalled 5,100 at a value of £700m, down 5.6 per cent and 12.5 per cent respectively compared to December 2017.

Over 2018 as a whole numbers dropped, too – there were 66,400 new BTL loans completed worth £9bn, a drop on 2017 to the tune of 11.5 per cent and 15 per cent, respectively.

BTL remortgages fared better – there were 12,400 new BTL remortgages recorded in the final month of last year, up significantly from the 9,900 seen in December 2017 – a 25 per cent increase – and, at £2bn, a rise of 25 per cent in value, too.

In the whole of 2018, there were 169,100 new BTL remortgages at £27bn in value – rises of 11.2 per cent and 11.6 per cent compared to 2017.

North London estate agent Jeremy Leaf says that FTBs are “taking advantage of reduced competition for smaller properties from buy-to-let landlords still reeling from recent tax and regulatory changes,” adding that these buyers are the “lifeblood of the market.”

Yopa chief property analyst Mike Scott agrees: “Since FTBs drive the whole housing market, allowing home movers to find a buyer and take the next step on the ladder, this is good news for the whole market,” he says.

Masthaven managing director of mortgages Matt Andrews comments: “It is interesting to note the continued downturn of BTL activity across the market. From tax alterations to regulatory updates, it seems the sector is really feeling the effects of these changes.”

Yorkshire Building Society strategic economist Nitesh Patel says that the figures show homemover activity having declined by 48 per cent in 2006, when there were 712,100 recorded.

However, he adds that the figures don’t include cash buyers, of which there were an estimated 280,000 in 2018. “This could mean we are seeing a rise in older homeowners downsizing by moving to a smaller and less expensive property. More people now own their own home outright than with a mortgage,” he says.

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