Good market news at last as first time buyer borrowers hit a 12-year high

After several days of gloomy market news, here's something more optimistic - there were 370,000 new first time buyer mortgages completed in 2018, some 1.9 per cent more than in 2017 and the highest number for 12 years. 

And there were 30,900 new first-time buyer mortgages completed in December alone, which some 1.6 per cent more than in the same month a year earlier. 

These heartening figures come from UK Finance, the umbrella organisation representing over 250 finance companies involved in mortgage lending. 

The organisation adds that there were 30,000 new homemover mortgages completed in December - down by 1.3 per cent fewer on the same month in 2017 - while in 2018 as a whole there were 367,800 new homemover mortgages completed, some 1.9 per cent less than in 2017. 

Remortgaging continues to be strong, with 34,000 new homeowner remortgages completed in December 2018 - that’s a hefty 9.3 per cent up on December 2017. 

A similar picture emerges for the full year: in 2018, there were 476,900 new homeowner remortgages completed, some 10.8 per cent more than in 2017. 

Unsurprisingly, buy to let mortgage volumes were down last year.

There were 5,100 new buy to let home purchase mortgages completed in December 2018, some 5.6 per cent fewer than in the same month a year earlier. In 2018 as a whole, there were 66,400 new buy to let home purchases completed, some 11.5 per cent less than in 2017. 

In this buy to let sector, too, remortgaging is popular.

There were 12,400 new buy to let remortgages completed in December 2018, some 25.3 per cent more than in the same month a year earlier. 

And in the full year of 2018, there were 169,100 new buy to let remortgages completed, some 11.2 per cent more than in 2017. 

"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” explains Jackie Bennett, director of mortgages at UK Finance.

"Homeowner remortgaging also saw strong growth driven by customers locking into attractive rates, a trend we expect to continue in 2019 as more fixed-rate mortgages come to an end.

"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.”

Agents and other industry players have responded enthusiastically to the broadly encouraging figures. 

“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. First-time buyers are the lifeblood for the market as they tend to move up the housing ladder, releasing chains, compared with landlords who usually buy at the lower levels and stay there” explains Jeremy Leaf, north London estate agent and a former RICS residential chairman.

Meanwhile Paul Smith, chief executive of Haart, comments: “We saw buyers return to the market in droves in January, and our latest brand data shows transactions across England and Wales are up 18 per cent on the year. With increased confidence in activity, we can expect price rises over the coming months.

“It is particularly promising to see that 2018 saw the highest number of first-time buyer mortgages completed in 12 years. This chimes with our branch data which shows a 8.6 per cent increase in first-time buyer registrations on the year.”

And Mark Harris, chief executive of mortgage broker SPF Private Clients, says the first time buyer news is “remarkable”, adding: “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.”