First-time buyers are looking to fixed—rate mortgages of longer lengths than they were 12 months ago according to Accord Mortgages.
The lender says the number of applications it has received from first-time buyers for five-year fixed rates has more than doubled year-on-year. More than half (51 per cent) of all first-time buyer applications in January were for longer-term fixed rates, compared to 20 per cent last January.
The number of borrowers looking for two-year fixed deals fell year-on-year, accounting for 48 per cent of applications last month, down from 63 per cent in January 2017.
First-time buyer deposits may have also grown according to Accord’s figures, with 85 per cent LTV mortgages seeing the largest increase in application numbers.
Figures from UK Finance last week revealed that first-time buyer numbers are at their highest levels in a decade.
Accord mortgage manager Ben Merritt says it is unsurprising that first-time buyers are rising given the changes to stamp duty and November’s base rate rise.
He continues: “Our data shows that first-time homeowners are making canny decisions about the type of home loan they choose, such as opting for longer terms, which reflects the sound advice brokers are likely giving to their clients.
“More and more first-time buyers are turning to a broker, perhaps because choosing a mortgage is one of the biggest challenges they will face in their adult lives. The growth in intermediary share of lending over the past five years, rising from 53 per cent in 2012 to 77 per cent in 2017, clearly demonstrates the value borrowers place on the role of a broker.”