First-time-buyer lending up 15% in November: UK Finance

UK Finance has reported 'buoyant' lending in November, as first-time buyer mortgages rose 15.2% compared to the same month last year.

Related topics:  Mortgages
Rozi Jones
16th January 2018
mortgage house first time buyer first-time complete broker
"Although there was a base rate rise in November, the money markets had already factored this in with mortgage rates not soaring afterwards."

There were 34,800 new first-time buyer mortgages in the month, with new lending in the month 16.7% higher than the previous year.

Home movers also saw strong November figures, with mortgage numbers up 16.8% annually and new lending up 19% to £7.5bn.

Remortgage lending rose 8.5% by volume and 10.2% by value.

Buy-to-let lending was the only sector to see annual falls, with house purchase mortgages 1.5% fewer than in the same month a year earlier and buy-to-let remortgage figures down 3.6%.

Paul Smee, Head of Mortgages at UK Finance, said: “The data shows housing market activity remains buoyant, despite November’s rise in the base rate. Steady increases in lending for house purchases together with increases in homeowner remortgages reflect a keenness among consumers to benefit from still historically low interest rates, and a highly competitive marketplace.

“In contrast, declines in buy-to-let lending reflect the changing regulatory and fiscal environment for landlord businesses, where some landlords might be inclined to reappraise the viability of their portfolios.”

Jonathan Harris, director of mortgage broker Anderson Harris, added: "The market is proving to be fairly resilient, with first-time buyers taking advantage of competitive mortgage deals and slowing house price growth. Although there was a base rate rise in November, the money markets had already factored this in with mortgage rates not soaring afterwards. This, combined with the stamp duty exemption, means first-time buyers are in a stronger position than they have been in a long time with many deciding that it is now time to take the plunge, although financial support from the Bank of Mum and Dad is still proving crucial for the majority.

"For landlords the picture is less rosy, with many reassessing their portfolios in light of tax changes. However, we still believe there are opportunities for investors when it comes to buy-to-let, although there may be fewer novices taking the plunge in future."

Jeremy Duncombe, Director, Legal & General Mortgage Club, commented: “Despite the Bank of England’s decision to raise the base rate in November, the market continues to show its strength. Not only did this increase act as a wakeup call to those whose mortgages were coming to the end of their term, but it also led to an increase in the number of first-time buyers looking to secure a competitive rate ahead of any further rate rises."

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