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First-time buyer mortgage approvals hit 10-year high despite higher UK house prices

First-time buyer mortgage approvals hit their highest level in more than 10 years in 2018, the latest data shows.

An estimated 367,038 first-time buyers took out mortgages last year, up from 362,800 in 2017, according to analysis from Yorkshire Building Society using UK Finance figures.

The number exceeded 2007 levels, when 359,000 first-time buyers secured mortgages, and is almost double the 193,300 taken out following the 2008 financial crisis.

Yorkshire Building Society strategic economist Nitesh Patel said: “Property prices have grown at a faster rate than wages over the past 12 years, which has created difficulties for first-time buyers.

“Various factors have helped to alleviate this challenging environment, although the market is still pretty tough for those wanting to become homeowners.

“However, the figures indicate that government initiatives such as stamp duty relief, Help to Buy equity loans and Help to Buy ISAs may have made an impact.

“Over the past three or four years, we’ve also seen more mortgage lenders offering 96 per cent loan-to-value mortgages, as well as strong competition driving mortgage rates down.

“This combination of factors has made buying a home more accessible in recent years. But getting onto the housing ladder is still not an easy step for many young people, as demonstrated by the increasing numbers who have received help from the bank of Mum and Dad.

“Despite these challenges, the first-time buyer market has bounced back following the financial crisis to outperform other sectors, such as the home moving and buy-to-let markets.

“Buying your first home remains tough for many by it’s encouraging to see first-time buyer levels at a ten-year high and climbing.”

Source: City AM

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First-time buyer mortgage approvals hit 14-month high

The number of mortgages approved for first-time buyers has hit a record high, but it’s not such good news for home movers.

Data from banking trade body UK Finance shows there were 35,500 new first-time buyer mortgages completed during August, 2% more annually and the highest level since June 2017.

In contrast, the number of mortgage approvals for home movers fell 2.3% year-on-year to 38,000 in August, while buy-to-let lending continue to suffer, down 13% annually to 6,000.

The number of remortgages was also down annually by 0.3% to 37,100.

Jackie Bennett, director of mortgages at UK Finance, said: “Overall house purchase completions remain stable, driven largely by the number of first-time buyers which reached its highest monthly level since June 2017.

“Buy-to-let remortgaging saw relatively strong growth in August, due in part to the number of two-year fixed deals coming to an end. This suggests that while new purchases in the buy-to-let market continue to be impacted by recent tax and regulatory changes, many existing landlords remain committed to the market.

“However, the home-owner remortgaging market has softened slightly, reflecting the many borrowers who had already locked into attractive deals in the months preceding the Bank of England’s base rate rise.”

Commenting on the data, Shaun Church, director at mortgage broker Private Finance, said: “First-time buyers are feeling empowered by the current housing market.

“Easing house price growth, Stamp Duty exemptions, relaxation of lending criteria and near record low mortgage rates are all giving new buyers a much-needed boost on to the property ladder.

“Those in a position to do so have heeded advice to take advantage of favourable market conditions, with mortgage lending to first-time buyers in August reaching levels not seen in more than a year.

“But existing home owners could well feel paralysed. As political and economic uncertainty takes hold, many home-owners are choosing to bide their time and see what 2019 brings.

“This uncertainty – and a lack of incentives for homeowners to move – means the home mover market continues to remain flat. This gives all buyers less choice when it comes to finding a new home.”

Source: Property Industry Eye