Top Mortgage News

Derin Clark

Derin Clark

Online Reporter
Published: 19/11/2019

More mortgage completions were made by first-time buyers than homemovers during September 2019, data released by UK Finance reveals.

The data shows that there were 29,100 new first-time buyer mortgage completions in September 2019 compared to 29,050 homemover mortgages completed, which were increases of 1.6% and 1.8% respectively compared to the same month the previous year.

While there was just a small difference between first-time buyer and homemover mortgage completions, historically homemovers mortgages outnumbered first-time buyers. In fact, research carried out by Moneyfacts.co.uk – using UK Finance data – found that in August there were 35,380 homemover residential mortgages compared to 35,010 first-time buyers, a difference of 370; whereas five years ago, in 2015, there were 33,800 homemover residential mortgages compared to just 26,800 first-time buyers – a difference of 7,000.

The reason for the growth in first-time buyers could be due to a combination of factors. The current stagnation of the housing market, particularly in the south-east of England, will have helped to make getting onto the housing ladder more affordable for first-time buyers. In addition to this, new buyers have also benefited from a number of Government schemes aimed at first-time buyers, such as the Help to Buy equity loan scheme. As well as this, competition between mortgage lenders has been particularly fierce this year, with first-time buyers benefiting from competitively low rates.

Mortgage borrowers will be pleased to see that the mortgage charts have remained highly competitive this week. In fact, there have been no rate rises for any of the top rates in the chart and a new low rate has taken the top spot in the five-year fixed moving home chart.

Saying this, it is important for mortgage borrowers to consider a range of factors when choosing the right mortgage deal and not just consider the lowest rate on offer. This is because sometimes better deals can be found on slightly higher rates when factoring in incentives and flexibility features.

Figures released today show that the number of homeowners in mortgage arrears has fallen by 9% in the period of July-September 2019, compared to the same period in 2018.

According to data released by UK Finance, there were 71,590 homeowners in mortgage arrears of 2.5% or more of the outstanding balance between July-September 2019. Along with the fall in the number of homeowners in arrears, the figures also show that there has been a drop in homeowners with more significant arrears of 10% or more, with 22,300 homeowners with significant arrears during July-September 2019, a fall by 8% from the same period in 2018.

While the number of those in arrears has fallen, the number of homeowner mortgaged properties were taken into possession during July-September 2019 has increased by 19% compared to the same period in 2018. 1,330 of properties were taken into possession during this period, but according to UK Finance, this increase was driven by a backlog of historic cases that are being processed.

According to a report just released by Post Office Money®, first-time buyers across the UK are saving up to an average of 21% of their new home’s value as a deposit. Getting on the property ladder is spurring one in three first-time buyers into working overtime, while a further 14% are prepared to get another job in search of extra funds to put away for a new home.

Homeowners who were able to fix their mortgage into a two-year deal in October 2017, when mortgage rates were at a historic low, should consider taking advantage of the current competitive remortgage rates to avoid repayments at substantially higher standard variable rates (SVRs).

Data released by the Moneyfacts UK Mortgage Trends Treasury report shows that in October 2017, two year fixed mortgage rates were at a historic low, at an average of 2.20%. Homeowners who were able to lock their rate into a deal at that time have benefited from low mortgage repayments, especially as the average rate jumped to 2.33% a month later when the Bank of England increased the base rate from 0.25% to 0.50% in November 2017.

With the two year fixed rate deals taken out in October 2017 now coming to an end, homeowners should look at remortgaging, or else they will have to make repayments at their mortgage lender’s SVR, which with the average SVR rate at 4.90% in October 2019, is substantially higher than locking into a new fixed deal.

Darren Cook, finance expert at Moneyfacts.co.uk, explains: “Just over two years ago, the mortgage market reached the end of a period of aggressive competition, which saw the average two year fixed mortgage rate fall to its historical low of 2.20% in October 2017. Borrowers who took advantage of this increased competition between lenders before the base rate rise in November 2017 may have seen a difference of 2.70% between their previous fixed rate and last month’s average SVR (4.90%).”

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