Derin Clark

Derin Clark

Online Reporter
Published: 31/05/2019

The number of people purchasing their first home is up in all regions across the UK, recent regional data trends released by UK Finance show.

According to the data, Northern Ireland saw the biggest increase in first-time buyers with 2,440 people buying their first home in the opening quarter of 2019, an increase of 11.4% compared to the same period the previous year. Meanwhile, the region that saw the most borrowers take their first step onto the property ladder in the first quarter of 2019 was London with 9,410 new homeowners, an increase of 1.6% compared to the same period the previous year. Scotland was next with 6,760 new first-time buyers, an increase of 4.5% in Q1 2018, while Wales was third with 3,450 new first-time buyers, an increase of 1.2%.

Lower mortgage rates for first-time buyers

First-time buyers have been bolstered by the falling rates at the high loan-to-value (LTV) tiers, meaning they can now get more competitive mortgage rates with a smaller deposit. In the past, first-time buyers looking for a mortgage at the 90% and 95% LTV tiers often had to settle for a much higher rate, however, the last few years have seen rates at these tiers in particular fall.

Research carried out by Moneyfacts.co.uk found that the average two-year fixed rate at 95% LTV  decreased to 3.25% in the past five years – a reduction of 2.08%. One factor that could explain this decrease in rates is that since May 2014, the number of mortgages available at the 90% LTV tier has increased by 144 to 288 products, while those looking for a 95% LTV now have 73 more products to choose from (147 in total). 

While mortgage rates at the higher LTV tier have decreased the most, over the last few years rates across all LTV tiers have fallen. This has squeezed margins for mortgage lenders and the intense competition has even pushed some providers out of the mortgage market altogether.

Commenting on how these improved mortgage rates affect consumers, Michelle Monck, financial expert at Moneyfacts.co.uk, said: “Improved mortgages rates for higher LTV mortgages is good news for those with smaller deposits and may help accelerate the time for some to reach their goal of homeownership. However, anyone looking for a mortgage should still consider how affordable the mortgage is, even at these lower rates, and decide if saving longer for a deposit might give them more of a buffer should house prices reduce in the future.”

Disclaimer

Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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