FTB loan applications rise by 33%

Loan Partnership

The proportion of mortgage applications by first time buyers surpassed that of home movers for the first time in January

Applications from FTBs have risen by 33% so far this year with first time buyers now making up a higher proportion of the home purchase market than at any time since at least 2016.

According to new analysis from the Yorkshire Building Society and business consultancy CACI, activity among first time buyers is up nearly 25% over the last eight years; they now make up around 40% of mortgage applications, compared to around 30% for the equivalent period in 2016.

And the proportion of mortgage applications by first time buyers surpassed that of home movers for the first time in January.

YBS director of mortgage distribution Jeremy Duncombe says: Things have changed substantially since UK Finance issued its forecasts last November.

The picture is a fast-changing one, and despite continued inflationary pressures keeping interest rates higher than hoped; along with ongoing volatility caused by economic and political uncertainty, consumer confidence appears to be returning, he says.

While there is continued uncertainty and it is therefore important to be cautious, the year has got off to a far better start than predicted, with housing market activity on the rise. House prices are predicted to settle and maybe even rise moderately throughout the rest of the year, with more stable mortgage rates resulting in more buyers deciding to dip their toes back in, Duncombe says.

The rise in first-time purchaser numbers could be attributed to a number of factors. We know from our own research that many are making life-changing decisions to prioritise homeownership over other milestones such as starting a family, he says.

He adds: High rental costs are making the prospect of owning a property more appealing and many may feel they are just not prepared to put off buying any more in the hope rates might drop.

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