First-time buyer mortgage lending on the rise as buy-to-let lending falls

First-time buyer mortgage lending on the rise as buy-to-let lending falls

Thanks to a number of fantastic Government initiatives such as the Help to Buy scheme, first-time buyers are increasingly being able to get on Britain’s property ladder. However, at the same time, buy-to-let investment appears to be falling in popularity across the UK, new research reveals.

The latest data from UK Finance reveals that new mortgage lending hit £5.4 billion in May – a 12.5 per cent rise on the previous month.

The number of first-time buyers who took out a mortgage on their first property was up by 8.1 per cent month-on-month, but the number of buy-to-let landlords taking on new mortgages fell by 9.8 per cent over the same period.

As many as 32,200 new first-time buyer mortgages completed over the course of the month, in comparison with just 5,500 new buy-to-let mortgages, the data reveals, with the overall value of buy-to-let lending down by 22 per cent.

Jackie Bennett, of UK Finance, said that the mortgage market enjoyed a “pre-summer boost” in May.

However, she noted that this “boost” was largely fuelled by first-time buyer lending and remortgaging activity – which were both particularly strong in May.

In comparison, she pointed out that buy-to-let lending had fallen significantly.

Among commentators, this is largely thought to be due to recent tax changes affecting the likes of Stamp Duty Land Tax (SDLT) and mortgage interest tax relief, as well as new ‘mortgage stress tests’ enforced by lenders.

“Purchases in the buy-to-let market continue to be constrained by recent regulatory and tax changes, the full impact of which have yet to be fully felt,” she said.