Rising number of First Time Buyers help stabilise faltering property market

First Time Buyers are propping up the an ailing property market, according to the latest data. There were 35,500 new First Time Buyer mortgages completed in the month, some 2% more than in the same month a year earlier, according to the UK Finance’s latest Mortgage Trends Update.

The £6.1bn of new lending in the month was 5.2% more year-on-year.  The average first-time buyer is 30 and has a gross household income of £42,000.

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.”

However, while first time buyers have been taking advantage of a slower market, homemovers are letting nerves get the better of them. There were 38,000 new homemover mortgages completed in the month, some 2.3% fewer than in the same month a year earlier. The £8.5bn of new lending in the month was the same year-on-year. The average homemover is 39 and has a gross household income of £57,000.

Buy to Let landlords are also shying away from the market. There were 6,000 new buy-to-let home purchase mortgages completed in the month, some 13% fewer than in the same month a year earlier. By value this was £0.8bn of lending in the month, 20% down year-on-year.

“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,” said Bennet. “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.”

According to the latest ONS data, average house prices in the UK have increased by 3.2% in the year to August 2018, down from 3.4% in July 2018, remaining broadly stable at a national level since April 2018.

Jeff Knight, marketing director for Foundation Home Loans said, “On the face of it, the fact house prices are not increasing steadily means there’s more opportunity for first-time buyers. However, market uncertainty has meant existing buyers are stalling.

“It’s crucial to recognise how ongoing political uncertainty and regulation impacts the market – making the case for a good supply of rental properties even more necessary. Ongoing activity may be slowing, but ensuring a consistent supply is crucial to keep momentum ticking over in the interim. Given the financial climate, it’s also fair to say we will see numbers of people requiring additional support from specialist offerings increase.”