The number of first time buyers over the past year has overtaken the number of home movers for the first time in more than a decade.
Over the past 12 months, the number of first-time buyers reached 345,000, according to latest figures from the Council of Mortgage Lenders (CML), the highest number since the start of 2008. In comparison, there were 344,000 home movers over the same period.
The CML said that mortgage lending in April was down 11% compared to the previous month, at £18.4 billion compared to £20.7 billion in March. Despite the slowdown, lending was still higher in April than in the same month last year, when a total of £17.7 billion was lent.
“First-time buyers and remortgage customers appear to be buoying the market, as low mortgage rates are encouraging borrowers to remortgage and attractive government schemes are helping first-time buyers,” said CML senior economist Mohammad Jamei. “We expect this trend to continue over the coming months.”
Rock-bottom mortgage rates are helping both first-time buyers and those remortgaging, with many enjoying the lowest monthly payments ever seen. If the Bank of England opts to keep the base rate at 0.25% again in June, it will mark 100 months since interest rates have been at 0.50% or less.
However, those with only a small deposit to put down have seen mortgage rates edge up slightly since the beginning of the year, which CML says may be partly down to the closure of the Mortgage Guarantee part of the Help to Buy scheme at the end of last year.
Average mortgage rates for those with larger deposits or a greater proportion of equity in their homes if remortgaging continue to fall however, with two, three and five-year fixed rates for those borrowing up to 75% of the property value all currently at record lows.
Our press spokesperson David Hollingworth said: “Borrowers should be making sure that they are taking advantage of these rates and keeping their mortgage costs to a minimum. All too many don't review their mortgage and our recent research found that not only were 36% sat on a high standard variable rate, but more than half have never even tried to remortgage.”
In contrast to remortgage and first-time buyer activity, buy to let and home mover numbers remain subdued, with the low number of movers meaning fewer properties for sale. Nine out of 10 properties on the market at any time are existing properties and not new ones. The CML said that this supply and demand imbalance will continue to support house prices, even as the rate of price rises slows.
Since the introduction of the stamp duty surcharge for second properties last April, only first-time buyer numbers have grown consistently.
Despite buy to let and home mover numbers weakening, the CML said lending had remained stable since last April, with an average of £20 billion a month borrowed.
First-Timers overtake homeowners