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First time buyer and home mover mortgage demand higher

The number of mortgages for new purchases to first time buyers and home movers is higher with increased borrowing values.

Research from UK Finance shows there were 32,260 first time buyers in October 2019 up 2.8% on the same month in 2018 and 33,370 home movers up 4.2% over the same period.

The size of the mortgage loan is higher with first time buyers rising 5% to borrow on average £174,133 for a new purchase and home movers were advanced £228,162 up 3.8% on the previous year.

First time buyers have more debt with loan to values rising from 77.1% last year to 78.2% in October 2019, their borrowing to income multiples higher at 3.54 and mortgage repayments to income were 17.2%.

Remortgage buyers reduce over the year

There have been 18,770 remortgage buyers taking additional borrowing of £51,000 in October and this has decreased by -20.8% compared to the same month in 2018.

The following table shows the type of buyer with average loan size, Loan to Value (LTV) and age to October 2019.
Borrower type Loan size LTV
Age
First time buyers £174,133 78.2% 32
Home movers £228,162 67.3% 41
Remortgage £182,244 58.0% 42
Equity release £95,857 30.6% 69
The number of remortgage buyers without equity withdrawals was 20,510 which was lower by -20.0% over the year with a Loan to Value of 58.0% showing there is 42% of equity in their homes.

In terms of the loan to income multiples for those remortgaging, this was 2.78 times slightly decreasing from the previous month and mortgage repayments to income were 16.6%.

For equity release buyers using a lifetime mortgage the average tax free amount was £95,857 and this can be used for any purpose such as repaying an interest only mortgage or purchasing a new car.

Second steppers show strong increase

The number of homeowners trading up has increased over the month with new mortgages up 15.1% or 4,380 from 28,990 in September 2019 to 33,370.

There has generally been a low supply of suitable properties on the market due to the impact of Brexit and over the year home mover numbers are up by 4.2% or 1,360.

In terms of mortgage values the increase is 14.9% rising £990 million from £6.62 billion to £7.61 billion for the month to October 2019.

Loan to values have increased slightly from 66.2% last year to 67.3% this year with borrowing to income multiples slightly higher at 3.32 and mortgage repayments to income were 17.6%.

For the month the number of buy-to-let investors increased 13.7% or 800 to 6,600 with mortgage values rising 20.8% from £13.4 billion to £16.2 billion, although these figures are slightly lower compared to last year.

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 for home and garden improvements or even 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.


Mortgage Best Buys

These are examples of mortgage products we can approach with many more offering interest rates and flexibility to meet your needs.

1.19% Fixed Rate
60% Loan to Value
£999 App Fee
2-Years Time
Reverts to 3.59%
1.16% Fixed Rate
60% Loan to Value
£1,525 App Fee
Until 01/11/2022
Reverts to 4.09%
1.17% Fixed Rate
60% Loan to Value
£1,025 App Fee
Until 31/09/2022
Reverts to 3.59%
1.18% Fixed Rate
60% Loan to Value
£1,034 App Fee
Until 31/10/2022
Reverts to 3.59%

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  • IMPORTANT

    Equity Release may involve a Lifetime Mortgage or a Home Reversion Scheme. To understand the features and risks, please ask for a personalised illustration. Equity Release may affect your entitlement to means tested state benefits and will impact on the size of your estate. For Equity Release London City Mortgages charge a fixed fee upon completion of £695. For Mortgages a fixed fee is charged on application. Typically this is from £295 up to £495 for the services selected.

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