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MONEYFACTS ARCHIVE. This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Derin Clark

Derin Clark

Online Reporter
Published: 16/10/2019

The number of first-time buyer mortgages completed in August was at its highest level since 2007, data released by UK Finance reveals.

According to UK Finance’s Mortgage Trends, there were 35,010 new first-time buyer mortgages completed in August, a 0.7% increase on July and the highest monthly total in 12 years .

Why the increase in first-time buyers?

Earlier this month, we reported that house prices are at their slowest growth since 2013 , which means that while house prices continue to rise, they are becoming more affordable for first-time buyers, especially as wages have risen in the last few years. This, coupled with a high level of competition within the mortgage market, has created an ideal environment for first-time buyers to get onto the housing ladder.

First-time buyer mortgages

While competition within the mortgage has been strong throughout 2019, competition among the higher 95% loan-to-value tier has weakened over the last few months. Saying this, there are still some highly competitive rates currently available in the first-time buyer chart. Newcastle Building Society offers the cheapest rate available at 2.59% (5.1% APRC) fixed to 28th February 2022 and reverting to 4.49% thereafter but charges a product fee of £498.00 and lacks any additional incentives. However, a number of first-time mortgage deals now have no product fees, such as HSBC’s rate of 2.69% (4.0% APRC) that is fixed until 31 January 2022, reverting to 4.19% thereafter . Not only does this deal not charge any product fees, it also still comes with the incentive of free valuation.

Rachel Springall, finance expert at, said: “Lenders have become more accommodating to first-time buyers over the past few years by expanding their range. This expansion was fired up largely due to Government influences to help consumers to get onto the property ladder, such as with the Help to Buy Mortgage Guarantee Scheme launched back in 2013. Since then, lenders have introduced many more low deposit deals and actively compete on both the rate and package to entice new borrowers.

“As it stands, first-time buyers have a decent array of products to choose from, over 300 fixed deals in fact, if they can afford a 5% deposit themselves or decide to turn to their family to get a guarantor mortgage. While it is important that they seek out a competitive interest rate, first-time buyers may also want to compare the overall package of any deal, particularly to save on the upfront cost. A free valuation and free legal fee package is worth considering in this instance, or even a perk of cashback, which can be used on removal costs.”


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