According to figures from a lobby group for the financial industry, UK Finance, in the 12 months leading up to May this year we have seen a rise in first time buyers, yet there has been a fall in buy-to-let mortgages. Could this be a sign that government and tax changes have resulted in a more balanced property market, making it easier for first-time-buyers to get onto the property ladder?
The number of first time buyers in May this year was 8.1% higher than the same time last year with 32,200 new mortgages completed. However, the buy-to-let figures are a stark contrast, as the number of new buy to let mortgages fell by 9.8% in May this year, compared to the same time last year to 5,500 mortgages completed.
The buy-to-let market has been restricted by recent tax and regulatory changes, and the full impact of this is still to be felt. In April 2016, changes to LLBT whereby anyone buying a second home, for any reason, would pay a higher rate of stamp duty than someone buying a property that will be their only home.
Help to Buy and shared ownership have played their part in this shift, helping people to buy a home that they otherwise wouldn’t have been able to afford.
There has certainly been a flourish of activity over the summer, which has been driven by a strong rise in first time buyers and those who are remortgaging. As of May this year, the average UK first time home buyer has a gross household income of £42,000 and purchases a home with a loan to value (LTV) of 85%.
The good news for many is that first-time buyers are rising, while the number of amateur landlords is falling. However, professional landlords and institutional investors remain active investors.
The Mortgage Hub is an independent mortgage advisor serving the greater Glasgow area. Whether you are planning to buy your very first home and need the right first time buyer mortgage, or are looking to re-mortgage due to a house move or to growing family – we understand your journey is so much more than a financial process, it’s a journey to achieve your dreams, improve your lifestyle and achieve your true potential.