Property & Mortgages

First time mortgages in the UK down significantly year on year in September

first-time buyer mortgages

The home lending market in the UK dipped in September with first time mortgages down 4.5% compared with the same month in 2017, latest figures show

The home lending market dipped in all sectors in September in the UK with first time mortgages down 4.5% compared with the same month in 2017, the latest figures show.

There were 29,400 new first time buyer mortgages completed in the month, some £5 billion of new lending which was unchanged year on year, the data from UK Finance shows.

The number of home mover mortgages also fell, down 8.4% year on year to £6.5 billion of new lending, down 5.8% compared with September 2017 while remortgages fell by 0.6% with the £6.4 billion down 1.5% year on year.

There were 5,200 new buy to let home mortgages completed in the month, down 18.5% year on year, amounting to £0.7 billion in lending, down 22.2% compared with September last year.

The data also shows that there were 12,300 new buy to let remortgages completed, a fall of 0.8%, amounting to £2 billion of lending in the month, the same year on year.

Director of mortgages at UK Finance, Jackie Bennett said overall remortgaging for both residential and buy to let properties have levelled out after a period of strong growth. This reflects the number of fixed rate loans reaching maturity.

Bennett said that buy to let home purchases have eased again in September, suggesting lending in this market remains subdued as a result of recent tax, regulatory and legislative changes. Demand for house purchases for both first-time buyers and home movers has also lessened, as affordability constraints continue to bear down on consumer demand for new loans particularly in London and the South East.

According to Dilpreet Bhagrath, mortgage expert at Trussle, the market is looking subdued at the moment as a lot of financial pressure is putting new buyers off and many people are reluctant to buy and sell properties until the Brexit deadline has passed.

He said what is positive is that remortgaging numbers are only fractionally down from last year, despite fewer people moving home this year.

Director at Private Finance, Shaun Church pointed out that activity at the lower end of the market is being stoked by strong mortgage affordability and incentives such as stamp duty cuts and Help to Buy.

Church said, but further up the chain, there is little incentive for second steppers or downsizers to move as the cost of doing so remains high and the post Brexit outlook is uncertain. Other areas of the market must not be neglected as movement is needed at all rungs of the ladder to improve affordability and avoid any knock-on effects further down the chain.

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