The first-time buyer boom

30th October 2019

Two women next to sold sign

The number of first-time buyers getting the keys to their new home has reached its highest monthly level since August 2007. (1)

There were 35,010 new first-time buyer mortgages completed in August 2019, not far off the August 2007 figure of 35,070. (2)

That was the same year that house prices in the UK were at their peak. (3)

The monthly figures follow a strong rise in the number of first-time buyer mortgages taken out this year.

FTB UK Finance chart

Now could be a good time to buy your first home

There’s been plenty of talk about the effect of Brexit on the housing market, and how the uncertainty has caused people to hold off buying or selling until they’ve got a better idea of what’s happening.

But it seems that first-time buyers are feeling much more bullish about the future.

They may be encouraged by the fierce competition in the mortgage market at the moment, with lenders trimming the interest rates on their products in order to attract more business.

For example, if you had a 25% deposit and wanted to go for a two-year fixed-rate mortgage in September 2019, you’d be looking at an average rate of 1.56%. (4)

A borrower in the same position a year ago would pay an average rate of 1.71%. (4)

The difference is even more pronounced on five-year fixed rates, where the average rate for a borrower with a 25% deposit has dropped from 2.01% in September 2018 to 1.80% last month. (5)

So, if you’re thinking about buying your first home, now could be a good time to take the plunge.

Mortgage rates

How to join the first-time buyer boom

The fact that lenders are not only keen to lend, but launching more attractive deals, is a big boost for prospective borrowers.

But with so many mortgage products to choose from, it can be tricky to work out which is the most suitable, especially if it’s the first time you’ve applied for a mortgage.

If you need some help, you may want to consider getting some advice from a fee-free morgage broker.

“A broker can discuss your situation and requirements, and help you work out what type of mortgage meets your needs,” said Ross McCarthy, a Mortgage Adviser at Trussle.

“They’ll also let you know which lenders are most likely to approve your application based on their criteria. Some are more forgiving if you don’t have a perfect credit score, for example.

“Another thing to remember is that a broker will have access to more deals than you could get if you borrow directly from a lender, as there are some mortgage lenders who only offer their loans through brokers.”

Sources:

(1) UK Finance

(2) UK Finance

(3) GOV.UK

(4) Bank of England

(5) Bank of England

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