A growing number of first-time buyers are shrugging off uncertainty surrounding Brexit and getting on the property ladder, new figures show.
Help to Buy schemes, stamp duty exemptions and cheap mortgage deals are giving new buyers the boost they need to get on that all-important first rung of the ladder.
In November, there were 36,200 new first-time buyer mortgages completed, marking a 5.8 per cent increase from the same point a year earlier, UK Finance said.
First-time buyer loans: There were 36,200 new first-time buyer mortgages completed in November
The average loan taken out by first-time buyers in November was £142,500, up from £138,000 in November 2017.
The average first-time buyer is 30 and has a gross household income of £42,000.
While the number of first-time buyers is showing encouraging signs of growing, the buy-to-let market remains ‘subdued.’
Saddled with higher stamp duty charges and regulatory burdens, the number of mortgage loans completed and dished out to landlords to buy properties came in at 6,100 in November, marking a 9 per cent decline from a year earlier.
By value this was £800million of lending in the month, 11.1 per cent down year-on-year.
In the buy-to-let remortgaging sector, however, there were 15,000 new buy-to-let re-mortgages completed, which is 9.5 per cent more than the same month a year earlier.
In June official figures confirmed that landlords are offloading 3,800 properties a month leading to the first drop in the number of homes available to rent in 18 years.
Jackie Bennett, Director of Mortgages at UK Finance said: ‘A mixture of competitive deals and schemes including Help to Buy saw even more first-time buyers get a foot on the housing ladder during November.
‘Meanwhile, homeowner remortgaging activity has steadied, after reaching its highest level in a decade the previous month as a large number of fixed-rate deals came to an end.
‘In the buy-to-let market new home purchases remain subdued, while remortgaging continues to grow as landlords lock into attractive rates.’
While current market conditions may prove fruitful for first-time buyers, a survey by The Royal Institution of Chartered Surveyors today has warned that surveyors’ expectations for house sales in the next few months are the worst seen for 20 years.
The Rics said that as well as Brexit uncertainty, domestic issues related to lack of supply and affordability continue to hamper the market.
Sales expectations for the next three months were the lowest since the survey began in 1999, with a balance of -28 per cent – the difference between the number of respondents anticipating increases and the number expecting decreases.
How much? The average loan taken out by first-time buyers in November was £142,500
Boost: Help to Buy schemes and stamp duty exemptions are helping to prop up the first-time buyer market
Commenting on today’s figures from UK Finance, Jeremy Leaf, a north London estate agent and a former RICS residential chairman, said: ‘First-time buyers are dipping their toes in the water, encouraged by improving affordability, reduced competition for smaller properties from tax and regulation-hit buy-to-let investors, some attractive mortgage deals and more stable employment prospects.
‘There is much talk about Brexit but we find that it remains a largely London/southeast preoccupation among homebuyers.
‘Elsewhere, affordability is just as important when it comes to buyers and sellers making home-moving decisions. Activity is likely to remain subdued before we leave the EU one way or the other – and immediately afterwards, bearing in mind the post-implementation period too.’
Charts: UK Finance charts showing lending patterns over time within the UK
Dilpreet Bhagrath, a mortgage expert at Trussle said: ‘These figures show Brexit uncertainty hasn’t prevented first-time buyers from grasping the opportunity to step foot on the housing ladder. The reality is that there are good deals to be had and many first-time buyers are taking advantages of schemes such as Help to Buy.
‘Meanwhile remortgaging has slowed, month-on-month, suggesting home owners have been adopting a ‘wait and see’ approach as we approached Brexit.
‘However, it’s worth remembering these figures relate to November, well before uncertainty reached its recent peak – linked to recent votes in Parliament. Because of this, we expect to see another surge in remortgaging in the coming months, as many home owners look to lock in fixed deals to avoid any instability in their mortgage payments.’
Shaun Church, director at Private Finance, said: ‘The first time buyer market is finally booming. With £6bn lending provided to first time buyers in November alone, the message is loud and clear that lenders are eager to offer mortgages to prospective homeowners.’
Meanwhile, Jonathan Harris, director of mortgage broker Anderson Harris, said: ‘Some buyers are of the view that the Brexit uncertainty means that sellers will take an offer that they might not have accepted a while ago, so for those who are cash buyers, chain-free or simply have their funding lined up, there are some buying opportunities out there.
‘Buy-to-let remains subdued although landlords are cannily re-mortgaging and cutting costs where they can.
‘Mortgage rates are still competitive, with some tempting rates for borrowers in both the residential and buy-to-let space.’