Mortgage borrowing increases for first time buyers | moneyfacts.co.uk
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Michelle Monck

Michelle Monck

Consumer Finance Expert
Published: 23/12/2019

According to the latest figures from UK Finance, the number of completed mortgages for first-time buyers and those moving home grew by 2.8% and 4.2% respectively in October 2019 compared to the same month last year. There were 32,260 first-time buyer completions and 33,370 home mover completions in October 2019.

Remortgages with additional borrowing saw a 20.8% reduction and remortgages only a 20% reduction compared to October 2018. While the decline is in contrast to other mortgage types, UK Finance have stated that this reduction is in line with their refinancing schedule model.

Buy-to-let mortgage completions were down in October 2019 compared to the same month last year, with new purchases reducing by 1.5% and remortgages down by 2.4%. The number of buy-to-let mortgages completed was 22,800.

Mortgage affordability trends

The statistics from UK Finance also showed increases in income multiples for those moving home and first-time buyers. Home movers saw their mortgage to be on average 3.32 times their salary an increase from 3.29 in October 2018. First-time buyers also saw a higher multiple at an average of 3.54, up from 3.50 from the same month last year. Those who remortgaged saw a reduction in their income multiple from 2.81% last year to 2.78% this October. This is probably a factor of the reducing levels of remortgages with additional borrowing during the month.

Borrower mortgage data

Borrower type

Average loan size

Income multiple

% of monthly gross household income to mortgage repayment

Average loan-to-value

First-time buyer

£174,133

3.54

17.2%

78.2%

Remortgage

£182,244

2.78

16.6%

58.0%

Moving home

£228,162

3.32

17.6%

67.3%

Source: UK Finance regulated Mortgage Survey October 2019

House prices see a boost and mortgage rates fall

The growth in first-time buyer mortgages and moving home mortgages is also evident in the latest house price data from the Halifax. They reported a 2.1% increase in prices in November 2019 compared to the previous year.

This growth is being supported by decreasing mortgage rates, for example the lowest interest rate for a two-year fixed rate mortgage has dropped by 0.10% between January and November 2019. Our review of the year has more about the changes in mortgage rates during 2019

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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