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First-time buyer numbers in 2019 ‘at highest level since 2007’

The number of people taking their first step on the property ladder is estimated to have reached its highest levels since 2007 last year.

Across the UK, there were 353,436 first-time buyers in 2019, slightly up from the 353,130 recorded in 2018 and the highest annual total since 357,590 in 2007, according to calculations from Yorkshire Building Society.

But there is still some way to go before first-time buyer numbers reach 2006 levels, when the annual total stood at 400,870.

The society used industry-wide mortgage data from trade association UK Finance up to October 2019 and estimates for November and December 2019 to calculate the total number of first-time buyers last year.

Nearly twice as many first-time buyers secured a mortgage in 2019 as at the start of the financial crisis in 2008 (191,040), with those entering the property market now accounting for more than half (51%) of homes purchased with a mortgage. In 2008 this share was just 38%.

Yorkshire Building Society strategic economist Nitesh Patel said: “Even though the number of first-time buyers has stayed pretty much the same as last year, it is still encouraging to see first-time buyers top 350,000 for the second year in a row.

“They also represent over half of all homes bought with a mortgage, meaning the first-time buyer mortgage market share is at its highest since 1995, when they bought 53% of all mortgage-financed homes.”

He continued: “In recent years first-time buyers have been helped by strong competition driving mortgage rates down to near-record lows, making borrowing more accessible…

“Also government schemes such as stamp duty relief, Help to Buy equity loans and Help to Buy Isas will have made an impact.

“This combination of factors has made buying a home more accessible in recent years.

“This has seen the first-time buyer market bounce back from the financial crisis and perform better than other sectors, such as the home-moving and buy-to-let markets.

“However, as these figures show, the market may have now reached its peak and buying your first home still remains tough for many.”

Here are Yorkshire Building Society’s tips for first-time buyers:

  • Before you start looking at properties, review your personal finances.

If you are concerned about your current monthly outgoings, try to reduce these at least six months before making a mortgage application.

It is a good idea to check your credit report and make sure all the information shown is correct, before applying for a mortgage.

Make sure you appear on the electoral roll for your current address and check any records of loans and credit cards.

  • Once you are happy with your finances, try out a mortgage cost calculator, available on mortgage lender or independent money advice websites.

This is an easy way to help you work out what you can afford and how much you would be able to borrow.

Factor in any deposit saved (usually at least 5% to 10% of the purchase price as a minimum) as well as legal and survey costs.

  • Consider speaking to a mortgage adviser or broker.

A mortgage adviser will look at your income, any debts you have and your deposit to make an assessment on how much you can borrow.

They will also help explain how a mortgage works and the things you need to consider before buying your first home.

It is important to do this at the start of your house hunt, so your search is realistic.

Getting a mortgage offer in principle would show sellers that your finances are already in place, making you an attractive buyer.

  • When choosing where to live, make a list of what is important to you.

Consider the number of bedrooms, parking and outdoor space – and whether location is more important than the property.

It may be key to look at local amenities such as schools, shops and transport links too.

  • Remember that house purchases rarely stick to the expected timeframes.

This will probably be one of the biggest financial commitments you will make in your lifetime, so it needs careful consideration.

By Vicky Shaw

Source: Yahoo Finance UK

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First-time buyer numbers up in October but re-mortgage activity falls sharply

The number of people getting on the property ladder was higher in October than a year earlier, but re-mortgaging levels fell sharply, figures from a trade association show.

Some 32,260 new first-time buyer mortgages completed in October 2019, 2.8% more than in the same month in 2018, UK Finance said.

There were also signs of increased activity among existing home owners who were moving properties.

There were 33,370 home-mover mortgages completed in October 2019, 4.2% more than in October 2018.

Meanwhile, there were 18,910 new re-mortgages where extra money was borrowed – down by around a fifth (20.8%) on a year earlier.

For these re-mortgages, the average additional amount borrowed in October was £51,000.

There were 20,660 new “pound-for-pound” re-mortgages with no additional borrowing – 20% fewer than in October 2018.

UK Finance said the fall in re-mortgage activity follows a strong period of growth in September.

Looking at lending to landlords, UK Finance said 6,600 new buy-to-let home purchase mortgages were completed in October 2019, 1.5% fewer than a year earlier.

There were 16,200 remortgages in the buy-to-let sector, 2.4% down on the same month in 2018.

The figures were released as a separate report from NAEA Propertymark (National Association of Estate Agents), which said the number of house hunters registered per estate agent branch decreased in November, from 341 to 332. This was the lowest figure seen since July.

The number of properties available per member branch remained the same in November, standing at 39.

Mark Hayward, chief executive, NAEA Propertymark, said greater political certainty, following last week’s general election, could now trigger more housing market activity.

He said: “The housing market now has reassurance from a Government, which will in turn inject some confidence in the market for both buyers and sellers.

“Now the political impasse is resolved and it’s clear how and when we’ll be leaving the EU, we hope there will be a degree of certainty which may trigger a flurry of activity.”

By Vicky Shaw

Source: Yahoo Finance UK

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First-time buyer numbers close to 12 year high

The number of first-time buyer mortgages in August 2019 edged towards the highest monthly total since August 2007, according to the latest data from UK finance.

In August this year, 35,010 first-time buyer mortgages completed compared to 35,070 in August 12 years ago just before the financial crisis struck.

The August 2019 rise was 0.7% on the same month in 2018.

There were 35,380 homemover mortgages in August 2019, a drop of 5.5% on the same month a year earlier.

A downturn in remortgaging

Remortgages with additional borrowing in August, fell by 2.9% year-on-year to 18,640 cases and the average additional amount borrowed was £55,000.

There were 18,100 new pound-for-pound remortgages (with no additional borrowing) in August, 2.3% fewer than in the same month a year earlier.

Buy-to-let numbers fall

A total of 5,900 new buy-to-let mortgages completed in August 2019, representing a drop of 3.3% from August 2018.

There were 13,800 remortgages in the buy-to-let sector, 0.7% fewer than in the same month the previous year.

Rob Barnard, sales director at Masthaven, commented: “This summer has been encouraging for the mortgage market. Lending activity has remained steady and first-time buyers continue to reap the benefits of Help-to-Buy.

“Remortgagers are taking advantage of the competitive deals available with lenders intensifying competition in the market by offering innovative products to homeowners who would rather stay put than move in the current climate.

“However, affordability and complex financial circumstances still leave many customers unable to secure a mortgage. With Help to Buy coming to an end in 2023, the mortgage market needs to continue to provide innovative solutions to encourage individuals onto-and-up the property ladder.”

By Joanne Atkin

Source: Mortgage Finance Gazette