Successful first-time buyer mortgage applications reach two-year high as home mover activity begins to stagnate


New figures show

Over three quarters (76 per cent) of first-time buyers’ mortgage applications via intermediaries resulted in a completion during Q1 2018, according to the latest Mortgage Market Tracker from the Intermediary Mortgage Lenders Association (IMLA), the highest number since the Tracker began in 2016.

This quarter’s figures compare with just under half of first-time buyers securing a mortgage (48 per cent) in Q1 2016, rising to 76 per cent in Q1 2017.

In contrast, the number of home movers making successful mortgage applications decreased by three percentage points over the quarter, as record low market liquidity and a lack of affordable housing continues to affect existing homeowners’ ability to move readily.

The quarterly IMLA report – which uses data from BDRC Continental – examines consumers’ success rate in securing a mortgage via the intermediary channel, by tracking their progress from initial expression of interest (seeking a ‘decision in principle’ through to completion. In doing so, it compares the fortunes of first-time buyers, home movers, remortgagors, buy-to-let (BTL) borrowers and applicants for specialist loans.

UK Finance data recently showed that first-time buyer numbers reached a ten-year high in 2017, with lending to this group continuing to increase year-on-year throughout the first three months of 2018.

IMLA’s Tracker suggests that this was helped by nine in ten (90 per cent) applicants securing a mortgage offer in Q1 2018 for the fourth successive quarter, up from 70 per cent two years earlier. More than four in five (85 per cent) of those offers in Q1 2018 went on to complete, compared to 69 per cent in Q1 2016.