First-time buyer (FTB) mortgages increase in April after a blip in March but remortgaging took a dive as recent mortgage trends suggest the property market remains confused in April.
According to UK Finance Mortgage Trends data for April, 27,370 first-time buyer mortgages were completed in April which represents a 7.9% increase from the data a year earlier. However, they are down on the 28,800 FTB mortgages completed in March.
There were 18,920 new remortgages with additional borrowing in April, a 0.3% increase from April 2018. However the 19,140 pound-for-pound remortgages equate to a 6.2% reduction from a year earlier.
Whilst this percentage fall could indicate people are reluctant to act in the current market, the 38,060 total remortgages in April was an increase of 6,212 remortgages from March’s total of 31,848.
The buy-to-let sector is also exhibiting more strength than many may have predicted. With both new mortgages and remortgages holding pace with the figures from a year earlier.
In April there were 5,100 new buy-to-let mortgages completed which is in line with figures from a year ago and 100 more mortgages completed than in March. Similarly, the 14,400 remortgaged buy-to-let properties are also in line with both April 2018 and the figures from March 2019.
Matt Andrews, Managing Director of Mortgages at Masthaven, commented:
“Today’s data suggests ongoing caution among borrowers, with remortgaging trends remaining high and homemover mortgages slightly lower than previous months. Improving not moving is something we are hearing becoming more commonplace within the market as individuals continue to wait out the ongoing political uncertainty.
“Following last month’s dip in the first-time buyer market, it is positive to see this significant portion of the sector bounce back. This is testament to a continued determination to get more feet on the property ladder from borrowers and lenders alike.
“As lenders, we must do all we can to ensure that products are diverse, rates are competitive, and clients of all background are catered for to keep the market moving.”
Chris Sykes, Mortgage Consultant at Private Finance, commented:
“First-time buyers are continuing to make the most headway in 2019’s housing market. For the third consecutive month, mortgage approvals among first-time buyers have outperformed the number of home mover approvals, as prospective buyers are capitalising on favourable conditions.
“Higher loan-to-values and loan-to-income multiples are helping to nudge home ownership closer to reality for millions of first-time buyers, enabling them to borrow larger sums while still satisfying strict lending criteria. What’s most encouraging to see is that despite this increase in lending, the financial commitment of a mortgage continues to remain steady thanks to near record low interest rates. Mortgage payments account for less than a fifth (17.2%) of first-time buyers’ monthly income, exactly in line with the same point last year.
“Competition in the mortgage market remains healthy, with banks eager to support this next generation of homeowners. First-time buyers can benefit from shopping around to secure the most competitive product. While there may be a tempting array of cashback offers and product deals intended to lure in customers, it’s important to consider the total cost of a product over the length of a term. Speaking to an independent mortgage broker can help borrowers look beyond the headline rate or cashback deal, to work out if it truly is the best product for them.”
Will the property market begin to gain more momentum as people start to see an end to protracted Brexit uncertainty?