Recent research has revealed that the first three months of 2018 saw over three-quarters of first-time buyers mortgage applications via intermediaries led to a completion.
According to IMLA’s most recent data, Quarter 1 saw 76% of first time buyers complete having secured a mortgage this way, compared to 48% in the corresponding period in 2016.
Data from UK Finance showed that in 2017, first-time buyer numbers hit a decade high, with money lent to this group on the rise. The growth could in part be attributed to further data from IMLA, which showed that in Q1 of this year, 90% of mortgage applicants were successful – up from 70% in 2016. Of those, 85% resulted in a completion, a significant rise from the 69% proportion two years earlier.
Commenting on the figures was executive director of IMLA, Kate Davies. She said: “First-time buyers’ struggles have been highly publicised, with affordability stretched by house price inflation and modest income growth. Yet rising levels of mortgage enquiries, applications and completions shows that first-time buyers remain interested, able and willing to get a foot on the property ladder, with this customer group performing better than any other in the mortgage market, both in the short-term and on an annual basis.
“As well as competitively priced and widely-available deals, many first-time buyers owe their success to initiatives such as the Help to Buy scheme, LISAs and stamp duty relief. However, this continued focus on first-time buyers has come at the expense of the rest of the market, which is becoming increasingly illiquid.
“The government’s commitment to improving access to the housing ladder has gone some way to increasing our supply of new and affordable homes – for example, nearly half (43%) of new build properties are currently a result of the Help to Buy scheme. However, while a significant number of aspiring homeowners have benefitted from these initiatives, many home movers, or ‘steppers’ continue to struggle with hurdles including high house prices relative to earnings, stricter mortgage affordability criteria and a lack of suitable homes.
“Recognition and support from both policy makers and lenders is needed for this group, to improve housing turnover and transaction volumes in the wider market. The government should take this pivotal juncture as an opportunity to reassess where in the market injections of new homes are needed: working with developers, planners and lenders to ensure the whole market is well-served.”
