First-time buyer growth continues

Latest data from UK Finance shows there were 24,880 new first-time buyer mortgages completed in February 2019, 4.1% more than in the same month in 2018.

23,660 homemover mortgages were completed in the month, 0.1% more year-on-year.

While homemovers are at the same levels they were at this time last year, this is the fifth consecutive month of year-on-year growth in first-time buyers.

There were 18,200 new remortgages with additional borrowing in February 2019, 10% more than in the same month in 2018. For these remortgages the average additional money taken out in February was £52,000. Additionally, there were 18,360 pound-for-pound remortgages (with no additional borrowing), 7.8% more than in the same period last year.

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The average loan to value ratio in the remortgaging market was 57% while the average loan-to-income ratio was 2.74. This is considerably lower than mortgages for house purchases which showed an average loan to value ratio of 72% and a loan-to-income ratio of 3.37.

UK Finance said customer engagement in the remortgaging market remains high with borrowers able to access a wide range of competitive products.

There were 4,800 new buy-to-let home purchase mortgages completed in February 2019, 7.7% fewer than in the same month in 2018. There were 14,400 remortgages in the buy-to-let sector, 2.1% more than in the same period last year.

While buy-to-let house purchases continue to contract due to tax and regulatory changes, buy-to-let remortgaging has increased as borrowers move from fixed rate mortages and lock into new attractive rates.

Joshua Elash, director of property lender MT Finance, said: “Those regions where both demographics and higher yields support investors continue to perform well, which is a big positive. However, London is by far the biggest, and most important, market. It is here where the war of attrition that is Brexit is being most painfully felt.

“A reported price fall of 3.8% over the year to February 2019, down from a fall of 2.2% in January 2019, is massive. This represents billions of pounds of lost value over a four-week reporting cycle.

“The market isn’t just stagnating from a lack of transactional volume, it’s bleeding value. Unless the government wakes up and begins to think about encouraging and supporting a market intentionally subdued by regulatory and tax changes, and further dampened by Brexit uncertainty, it’s only going to get worse.”