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First time buyers out in force over the summer

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The latest figures released by UK Finance have shown that there was strong growth in first-time-buyer numbers over the summer – with year-on-year figures up 5.8%.

According to the data, 32,640 new first-time buyer mortgages and 32,710 homemover mortgages completed in July 2019 yearly rises of 5.8% and 1.4% respectively.

There were 20,760 new remortgages with additional borrowing, an annual fall of 7.1%, while new pound-for-pound remortgages (with no additional borrowing) were down 12.9%. UK Finance says this has been driven by a fall in the number of fixed-rate mortgages coming to an end and the growing popularity of product transfers.

There were 5,800 new buy-to-let home purchase mortgages completed in July, 5.5% more than this time last year, and buy-to-let remortgaging rose 2% to 15,100.

The property industry was quick to react.

Mark Harris, chief executive of mortgage broker SPF Private Clients said, “The uplift in first-time buyer numbers in July compared with last year is welcome as they are so important to the market. This reflects lender efforts to offer products with high loan-to-values or innovative deals which allow parental assistance. It also suggests that the Bank of Mum and Dad is busier than ever, helping offspring with that all-important deposit.

The buy-to-let sector is also demonstrating resilience, despite significant tax and regulatory changes. Investors are still keen on bricks and mortar where they can find the right opportunity.”

Gareth Lewis, commercial director at property lender MT Finance said, “These figures are all up on last year apart from the remortgaging side of things and even that’s because more people are opting for product transfers because they are so easy to do.

The great news is that first-time buyers continue to buy property as they stimulate the whole market and are a critical part of the housing market functioning normally.

Many of those remortgaging are taking some equity out of their property which is not necessarily a bad thing as from our experience many are using this to fund improvements, extensions and renovations, rather than to pay down excessive debt that they have built up. Also, they are not over-stretching themselves on the loan-to-value, which is encouraging.

Buy-to-let continues to be steady. Investors are still investing where they find opportunity to do so.”

Jeremy Leaf, north London estate agent and a former RICS residential chairman said, “Although a little historic, these figures confirm what we are seeing on the ground – in other words, the market is not collapsing and first-time buyers in particular remain active, taking advantage of various tax and regulatory changes which have compromised many accidental landlords in particular.

“However, it is clear their departure has meant those landlords remaining in the sector have been able to profit from a reduction in supply of available properties which has meant rents have risen as a result.”

David Copland, director of mortgage services at TMA said, “On the whole, this summer has been encouraging for the mortgage market. Lending activity remained steady whilst borrowers continued to reap the benefits of deals and initiatives geared towards their needs. In particular, we saw the outlook for first-time buyers brighten even further as their numbers reached the highest level in over two decades.

“The remortgage market is also showing growth potential. Recent market data suggests that over £77.5bn of residential and buy-to-let terms are set to mature between now and the end of the year. This makes it the perfect time for advisers to re-engage with any customers who are approaching the end of their terms to make sure they are on the best deal possible. But the industry needs to help here too; we need to ensure that advisers have all the tools they need to continue producing optimal outcomes for borrowers and therefore retain their clients.”

Vikki Jefferies, proposition director at Primis Mortgage Network added, “A major factor behind the increase in mortgage lending is the remarkable job advisers are doing in securing optimal outcomes for clients. Professional planning is integral in helping borrowers with the financial milestones they’ll face throughout their lifetime, and it’s important we remember the crucial role advisers play in this.

“However, it’s vital for brokers to remember that financial planning spans much more than just mortgages, and there are other avenues which their business can take to help them retain clients – particularly within the current climate. For example, 60% of consumers said they’d struggle with a loss of income within six months. This signals a great opportunity for brokers to be including income protection as part of their conversations with clients and, ultimately, stand their business in good stead for the future.”




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