Positive September for first time buyers and remortgages

Ongoing political and economic uncertainty has failed to deter first-time buyers, with growing numbers managing to get on to the property ladder.

There were 29,100 new first-time buyer mortgages completed in September this year, according to latest figures from trade body UK Finance, up 1.6% compared to the same month in 2018. The average loan size for a first-time buyer is £174,223, UK Finance said, with buyers typically borrowing 3.52 times their income to secure their first home. The average age of a first-time buyer is 32.

Homemover numbers were also up. There were 29,050 homemover mortgages completed in September 2019, 1.8% more than in the same month a year earlier.

Remortgage numbers strongest

Remortgage activity was strongest in September, helped by the current price war as lenders compete for end of year business. There were 17,740 new remortgages with additional borrowing in September 2019, up 5.9% compared to the same month in 2018. The average additional amount borrowed was £50,000, suggesting some homeowners may have decided to stay put and improve their current properties rather than move. There were 19,140 like-for-like remortgages with no additional borrowing, 8% more than in 2018.

Only buy to let purchases were down, with 5,500 new buy to let purchase mortgages completed in September, 3.5% fewer than in September last year. Buy to let remortgage numbers remained steady, however, with 12,900 remortgages completed, the same number as in September 2018.

Low mortgage rates helping drive activity

Mortgage rates are currently exceptionally competitive, especially five-year fixed rates, with some deals available at rates below 1.5% for those with a large deposit to put down, or a significant amount of equity if remortgaging.

However, homebuyers, movers, and those looking to remortgage, shouldn’t choose a mortgage based on the headline rate alone. It’s important to look at the total cost, including any arrangement fees, incentives and flexible features, when deciding which deal is right for you.

If you’re considering a longer-term fixed rate, it’s also vital to consider whether your circumstances are likely to change during the fixed term period. If you think, for example, that you’re likely to move home, you’ll need to opt for a deal which is portable. Bear in mind however, that even if your deal is transferable, you’ll have to meet your lender’s eligibility criteria at the time of your move.

If you need help deciding which mortgage deal to go for, contact one of our advisers who’ll be able to talk you through all the best options based on your individual circumstances.