New data revealed mortgage lenders signed off on 30,720 new first-time buyer mortgages in May, which is 0.5% more than in the same month in 2018.
Yet, at the same time, there was a 1.2% drop in the number of mortgages being completed for borrowers who were moving home.
The data, which was released today by the body which represents the banking and mortgage industry, UK Finance, offers further evidence that market conditions are still strong for those taking their first steps onto the property ladder.
Indeed, Jeremy Leaf, north London estate agent and former Royal Institution of Chartered Surveyors (RICS) residential chairman, explained overall mortgage activity had declined compared with this time last year, but first-time buyer figures had gone the other way.
He added: “The encouraging news is that first-time buyer numbers are proving more resilient than we might otherwise have expected.
“First-time buyers are the lifeblood of the market as they buy at the bottom and trade up after a few years rather than investors who tend to buy at the bottom and tend to stay there.”
Challenges
One of the factors experts think is helping more first-time buyers realise their dreams of homeownership is the abundance of support available – in the form of schemes such as Help to Buy and stamp duty cuts.
There were also many who have tapped into the Bank of Mum and Dad to help them afford their first home.
Lenders were also becoming increasingly competitive when it comes to attracting first-time buyer custom, creating more products which appeal to buyers with smaller deposits.
However, most industry insiders agree there is still more which needs to be done to help more potential first-time buyers reach their ultimate goal of homeownership.
Louisa Sedgwick, director of sales, mortgage at Vida Homeloans said: “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.”
Advice to first-time buyers
Kevin Roberts, director, Legal & General Mortgage Club, offered advice to would-be first-time buyers who did not have the support of their family – also known as the Bank of Mum and Dad – to make their home purchase.
“Saving a deposit remains a big barrier for younger buyers, but there are options. Speaking to a mortgage adviser could be a great starting point for these individuals.
“Through their extensive knowledge and view across the market, these professionals will be able to show borrowers some of the great routes to get onto the housing ladder, such as guarantor mortgages and Government schemes like Shared Ownership, which could make the difference when it comes to getting the keys to their first home.”
[box style=”4″]
What Mortgage has teamed up with L&C to offer you expert advice on the right mortgage deal.
Whether you’re buying a new home, remortgaging to a new deal or buying an investment property, L&C can help – and you’ll pay no fee for their advice. To find out more, click here.
[/box]
