The first time buyer market remains buoyant with over 4% more purchasing their new homes compared to this time last year.
Data released from UK Finance shows 24,880 new first time buyers getting on the property ladder increasing 4.1% to February 2019 compared to the same month last year with numbers of 23,660.
The total value of borrowing has improved from £3.8 billion in February 2018 to £4.0 billion, an increase of 5.8% for the year.
This is the fifth consecutive month of year-on-year growth in first time buyers whereas home mover mortgages completed only 0.1% more over the year.
In contrast buy-to-let landlords with new purchase mortgages have reduced by -7.7% to 4,800 due to changes to stamp duty and taxation allowance on mortgage interest, making it less attractive to buy.
Remortgage buyers are 10% higher
The number of remortgage buyers taking additional borrowing has increased by 10.0% to 18,200 compared to the same time a year ago of 16,540.
On average these homeowners have taken £52,000 of additional borrowing in February with total remortgage by value of £3.3 billion increasing 9.4% for the year.
In addition there were 18,360 homeowners taking advantage of low interest rates and remortgaging to a new preferential rate with a total loan value of £3.0 billion increasing 13.6% compared to the same period in 2018.
The average loan to value (LTV) ratio for remortgages was 57% and this would mean these borrowers are offered the lowest interest rates from lenders with access a wide range of competitive products.
Loan sizes are an average of £174,138 with a loan-to-income ratio was 2.74 which is affordable and significantly lower than the maximum income multiple of 5 times.
In contrast buy-to-let landlords have not seen a significant improvement in remortgage numbers of 14,400 an increase of only 2.1% over this time a year ago.
No change for home movers
The number of home movers in February is virtually unchanged at 23,660 rising only 0.1% compared to the same period in 2018.
Over the last year the total value of loans was £5.0 billion increasing 1.0% with the average loan to value of 66.6% which is higher than the previous year, although very competitive mortgage rates will still be available.
Home movers are aged 40 years with loan sizes averaging £214,062 as most are upsizing and have a loan-to-income ratio of 3.27, reflecting a greater burden of buying a larger property.
First time buyers are younger with an average age of 32 years and the highest average loan-to-income ratio of 3.47, as new homeowners stretch to buy their first homes.
The loan sizes average £163,507 with the average loan to value of 77.0% which is slightly higher than the previous year and with average deposits of 23% mortgage rates will be competitive.
For older homeowners there is significantly higher activity with equity release buyers in London accessing cash in their property with a lifetime mortgage to improve your quality of life or pay university fees for grandchildren.
What are your next steps?
Call our LCM mortgage brokers for advice if you are a first time buyer, want to remortgage your existing home for the best mortgage deal, moving home or a buy-to-let investor.
For equity release buyers our London City Mortgage advisers can recommend lifetime mortgages allowing you to receive cash from your property to repay an interest only mortgage or pay for care at home.
Start with a free mortgage quote or call us and we can take your details. Learn more by using the property value tracker chart, mortgage costs calculator and equity release calculator.
