UK Finance’s Mortgage Trends Update for May 2019 has revealed that there were 30,720 new first-time buyer mortgages completed during the month, 0.5% more than in the same month in 2018. There were 29,430 homemover mortgages completed in May 2019, 1.2% less than in the same month a year earlier.
There were 21,370 new remortgages with additional borrowing in May 2019, 19.8% more than in the same month in 2018. For these remortgages, the average additional amount borrowed in May was £52,000. Additionally, 19,650 were pound-for-pound remortgages (with no additional borrowing), 19.7% more than in May 2018. This is in line with the initial fixed rate period of mortgages coming to an end which is a prompt for customers to review their mortgage.
There were 5,500 new buy-to-let home purchase mortgages completed in May 2019, the same number as this time last year. There were 15,000 remortgages in the buy-to-let sector, 2% more than this time last year.
Louisa Sedgwick, director of sales for mortgages at Vida Homeloans, said: “First-time buyers remain an important part of the mortgage market, they made up the biggest part of the property market in 2018 for the first time in 23 years. It is no surprise that they are a sector of the industry that mortgage lenders are keen to attract, with the amount of completed first time buyer mortgages rising year on year.
“With the average age of a first-time buyer now 32, the industry must continue to support those facing an uphill climb when it comes to buying a home. By providing affordable and sustainable rates, offering innovative, out the box thinking and diversifying product choices, lenders will continue to do their part in driving the UK first-time buyer mortgage market forward.”
Stuart Wilson, corporate marketing director at More 2 Life, added: “Today’s statistics from UK Finance show that confidence amongst first-time buyers remains high despite some other areas of the market being more subdued. Help-to-Buy, along with other government initiatives, have gone a long way to help this pool of homeowners fulfil their borrowing needs – but some need to look further afield for financial support to afford their first home. While prices have dipped slightly, the average UK house price (£308,692) remains high in comparison to average salaries and finding enough to put down a 25% deposit (£77,173) without help is out of reach for most people.
“Consequently, the Bank of Mum and Dad remains strong as parents and grandparents continue to support these borrowers’ by stepping in with a ‘gift’ to assisting them onto the property ladder by sharing their property wealth. According to last Autumn’s report from the Equity Release Council, 1.1 million properties in England were purchased with the support of a gift or a loan from family or friends between 2017 and 2018. As more older homeowners realise the full potential of equity release and the benefits it can bring not only to their lives, but also to their families, advisers will have a crucial role to play in helping to guide these individuals to the right solution for them.”