Tempting mortgage rates and incentives such as Help to Buy boosted the number of first-time buyers towards the end of last year.
Figures have revealed 36,000 new mortgages were completed by those taking their first step on the housing ladder in November. This was nearly 6% more than in November 2017.
The amount loaned to first-time buyers in the month was £6 billion – just over 9% more than the previous year.
Jackie Bennett, director of mortgages at UK Finance, which published the figures, said a mixture of competitive deals including the Help to Buy scheme contributed to this rise.
But other industry experts thought Government incentives such as stamp duty exemption, which means many first-time buyers do not have to pay the land tax, also had an impact. Lenders, it seemed, were also providing a helping hand.
Jonathan Harris, director of mortgages at broker Anderson Harris, said lenders had been tempting first-time buyers with attractive rates on loans where only small deposits were required.
He added: “First-time buyers have also benefited from the lack of competition for smaller homes from landlords, with many investors giving buy-to-let a wide berth.”
Are things getting easier for first-time buyers?
According to figures from Haart estate agents, the average first-time buyer deposit dropped 6.4% on the year at the end of 2018.
While schemes such as the Help to Buy ISA, a savings vehicle with a Government bonus, is being scrapped, the new generation of buyers will be able to benefit from the extension of Help to Buy: Equity, which will now run until 2023.
What’s more, competition from buy-to-let landlords has softened on smaller properties because of tighter rules brought into this market which have made renting out homes less appealing.
Shaun Church, Director at mortgage broker, Private Finance, said: “With competition for the business of first-time buyers high, lenders are wooing new homeowners through competitive rates, modified lending criteria, higher loan-to-values and more affordable income multiples. As such first time buyers are increasingly empowered, with their first step onto the property ladder becoming more attainable and affordable.”
He offered some advice. “Before first-time buyers rush into a mortgage, we urge them to shop around and look beyond the headline rate or tempting cashback deals to understand the total cost of their mortgage over the full term, when all fees and costs are taken into account,” he said.
