More first time buyer mortgage applications accepted
The proportion of mortgage applications by first-time buyers that are being accepted by banks and building societies is on the rise, according to new data.
Figures from the Intermediary Mortgage Lenders Association (IMLA) have indicated that 74 per cent of applications from first-time buyers made in the final quarter of 2017 were accepted, compared with only 53 per cent in the last three months of 2016.
Of those going through an intermediary, the success rate rose year-on-year from 71 per cent to 87 per cent.
IMLA spokesperson Kate Davies said: “Our improving success in satisfying the finance needs of first-time buyers throws the spotlight onto policy-makers to ensure that pressures on the availability and affordability of housing in the UK do not put young households off applying in the first place.”
She added that lenders are now applying “rigorous” affordability tests in anticipation of a gradual rise in the Bank of England’s base rate.
So far, however, it seems the more detailed the test, the more first-time buyers are proving they meet the necessary criteria.
Indeed, the improvement in first-time buyer success in getting mortgages was greater than those of any other category, including buy-to-let.
These findings may be instructive for agents and landlords planning ahead in 2018, as a continuance of the trend could see the number of aspiring first-time buyers staying in rental accommodation for an extended period of time falling.
Indeed, it may be that the number of younger people choosing to rent at all drops, as increased optimism of success in getting the housing ladder may prompt more to stay at home with their parents while they work to build up the money for a deposit.
The upward trend in mortgage approvals appears to have continued into this year.
Bank of England figures revealed that January saw the largest month-on-month increase in mortgage approvals for home purchase in three years.
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