First Time Buyers Continue To Fuel The Market
Generous mortgage rates, stamp duty reductions & cheaper houses behind continued surge
Almost 2,000 more first-time buyers climbed onto the property ladder in July than in the same month last year, official figures have confirmed.
Data released today by banking trade body UK Finance revealed that there were 32,640 new first-time buyer mortgages completed in July, some 5.8 per cent more than in the same month last year.
Meanwhile,the number of people moving house has roughly stayed the same. UK Finance said there were 32,710 home-mover mortgages completed in July, just 1.4 per cent more than in the same month in 2018.
This means that in July, there were just 70 more homeowners moving house than there were first-time buyers completing a mortgage on their first property.
In July there were just 70 more homeowners moving house than there were first-time buyers
This continues the trend seen this year of first-time buyers taking a greater share of the property market,as they take advantage of cheaper mortgages, less competition meaning slower house price rises and a stamp duty break.
The total amount lent to first-time buyers was also up to the highest seen so far this year, up 8.5 per cent to£5.7billion.
Shaun Church of mortgage brokers Private Finance said: ‘As existing homeowners approach the UK property market with a slight sense of caution, first-time buyers continue to be emboldened by the current market conditions
‘The traditional barriers that have long been blocking many first-time buyers from purchasing a home over the years are eroding. House prices are easing, stamp duty has been taken out of the equation for many and mortgage rates have fallen considerably.
‘The challenge of raising a sizeable deposit – which has typically been the greatest obstacle facing first-time buyers – has been minimised or removed altogether thanks to the flurry of 90-95 per cent mortgages and launch of 100 per cent mortgages.’
Though first-time buyer figures were strong in July the month saw fewer remortgaging than last year,despite a recent flurry of gloomy economic forecasts.
There were 20,380 new remortgages with no additional borrowing in July 2019, 12.9 per cent fewer than in July 2018.
UK Finance said this was partly due to a fall in the number of fixed-rate mortgages coming to an end compared to last year.
There were just 20,760 new remortgages with additional borrowing in July 2019, 7.1 per cent fewer than in the same month in 2018.
For these remortgages, the average additional amount borrowed in July was £55,500.
Estate agent Jeremy Leaf said: ‘The market is not collapsing and first-time buyers in particular remain active, taking advantage of various tax and regulatory changes which have compromised many accidental landlords in particular.’
Article sourced from This is Money website in an article by Will Kirkman on 17th September 2019 . Original full article can be viewed by clicking link below
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