In March 2018, £5.1bn was loaned to UK first time buyers, an increase of 2% on March 2017, while lending to other market sectors has fallen, according to UK Finance. In fact, loans to buy-to-let landlords buying property is dropping by 20% year-on-year! So why is the market looking so good for first time buyers?
Since the introduction of the 3% stamp duty surcharge for second home purchases, the buy-to-let market has been growing slower; and it’s precisely the fall in rental properties that’s helping new home buyers. Now they are less likely to be going up against a property investor for their ideal small home. Mike Scott, chief property analyst at Yopa, said: “First-time buyers are keeping the housing market going. First-time buyers have doubtless been helped by a very sharp fall in the number of buy-to-let mortgages.”
Separate research from the National Landlords Association found that one in five landlords, equivalent to 380,000 investors, plans to sell a property in the coming year. Just under half of these will be selling a flat, while 33% will be putting a terraced house on the market. These are both property types that are particularly appealing to first-time buyers.
In addition, first-time buyers are currently benefitting from the stamp duty cut introduced in last year’s Autumn Budget; and 100% mortgages are now available from several lenders, meaning that they do not need to rely so heavily on the Bank of Mum and Dad…well, not directly at least. Mum and Dad will still likely have to support you if you go for a full mortgage as 100% loans will require a guarantor, with their property being used as security against a proportion of the mortgage.
A 100% mortgage isn’t the only choice that first-time buyers have when looking for a different route on to the property ladder, and it’s always a good idea to shop around and consider the range of mortgage products on offer.
If you’re a first-time buyer looking for a property in East Kilbride, get in touch with Joyce Heeps Homes today for help and advice.