First-time buyers return to market ‘as loan criteria eases’
Research by Savills shows that first-time buyers are spending more on house purchases, as Nationwide makes it eaiser for FTBs to secure loans.
First-time buyers (FTBs) are returning to the property market, research by Savills reveals as Nationwide relaxes its criteria for this group of property purchasers.
Spending on house purchases by FTBs was more than £21 billion in the second quarter this year, up £4.1 billion on last year.
And Savills says FTB activity accounted for 24% of all spending in the market, the highest proportion in eight years.
Competition hots up
Nationwide is now allowing FTBs to borrow up to six times their annual income for a mortgage, which has increased from 5.5 times.
Also, as the competition between lenders hots up, Santander is now offering rates below 4% on two-year fixed mortgages.
Total spending on house purchases was higher than £350 billion in the year to the end of June, Savills says. This figure included £88.3 billion spent in Q2, an 8% increase on the same period last year.
Spending by cash buyers made up 43% of the housing market last year, but fell by £2 billion to 39% in Q2.
Lower mortgage costs will encourage a wider range of buyers back to the housing market.”
Lucian Cook, Head of UK Residential Research at Savills, says: “Lower mortgage costs will encourage a wider range of buyers back to the housing market.
“In particular, we should see an increase in upsizers, who put plans to trade up the housing market on hold in the face of higher mortgage costs,” he says.
“This cohort is likely to be at the forefront of that growth, although some may wait until after the Government’s October budget before taking the leap.”
