The number of first-time buyers in the market has hit a decade-long high, according to new figures. Nonetheless, growth in the mortgage market still looks set to be subdued this year, thanks largely to the faltering buy-to-let market. UK Finance has revealed that the number of first-time buyers (365,000) last year was the highest since 2006, as well as being 7.4% up on 2016 (when there were 340,000). That was despite the fact that the level of mortgage lending for first-time buyers, home movers and buy-to-let purchases all fell in December 2017, as compared to the previous year.
There were 5,300 new buy-to-let house purchase mortgages completed in December, some 17.2% fewer than in the same month a year earlier. By value this was £0.8bn of lending in the month, 11.1% down year on year. There were 9,900 new buy-to-let remortgages completed in December, which was 11.6% fewer than in the same month a year earlier. By value this was £1.6bn of lending in the month, 11.1% down year on year.
Meanwhile, there were 30,800 new first-time buyer mortgages completed in December, which was 5.2% fewer than in the same month a year earlier. The £5.1bn of new lending to first-time buyers in the final month of 2017 was 1.9% down year on year. The average first-time buyer is 30 and has an income of £41,000 a year, according to UK Finance.
When it came to remortgages, the number of people completing both home move remortgages and home owner mortgages both increased. There were 30,700 new home mover remortgages completed in December, some 4.7% more than in the same month a year earlier. The £6.5bn of new lending in the month was 3% down year on year. There were also 30,500 home owner remortgages completed in December 2017, which was 7.4% more than in the same month a year earlier. The £5.2bn of remortgaging in the month was 8.3% more year on year.
Paul Smee, head of mortgages at UK Finance, said: “2017 saw the number of first-time buyers reach its highest level in a decade, which is welcome news for those getting started on the housing ladder. “But although the market remains competitive there is no room for complacency, with weaker December figures consistent with our market forecast of subdued growth this year. “We are also seeing a less buoyant buy-to-let market, which continues to be impacted by recent tax and regulatory changes. This will continue to flatten gross lending volumes this year.”