First Time Buyer Applications Rise

The latest research conducted by the Intermediary Mortgage Lenders Association (IMLA) has found that 67 per cent of first-time buyer mortgage applications made via intermediaries resulted in completions during Q1 2017 - a rise of 19 per cent from just 48 per cent in Q1 2016.

According to the report, the average number of enquiries received by intermediaries serving this segment of the market rose from 55 in Q1 2016 to 60 in Q1 2017. The proportion of enquiries leading to applications in principle also increased from 51 per cent to 57 per cent.

The rate of first-time buyer applications resulting in completions has been steadily improving over the past year. In Q2 and Q3 2016, 49 per cent of first-time buyer applications to intermediaries resulted in completions, increasing to 53 per cent in Q4. Comparing year-on-year, it means the ratio of first-time buyer completions has improved more than any other segment of the market.

Peter Williams, Executive Director of IMLA, commented: “First-time buyers’ struggles have been highly publicised, with affordability stretched by rising house prices and modest income growth. However, rising levels of mortgage enquiries, applications and completions shows that a significant number of first-time buyers are still both willing and able to get a foot on the property ladder.

Low mortgage rates have contributed to this improving outlook for first-time mortgage borrowers. However, with the Bank of England reporting that average rates are creeping up on the higher loan-to-value products that buyers with modest deposits rely on, policymakers must continue to do their upmost to support lending to this part of the market.

The improving ratio of enquiries and applications to mortgage completions over the last year is a testament to the success of the intermediary channel in matching consumers with suitable products in a complicated and competitive marketplace. The intermediary channel is well placed to deal with the needs of the growing number of borrowers with non-standard circumstances, which is reflected in intermediaries’ high levels of confidence. In Q1 2017, 99% of intermediaries reported they were confident in the outlook for their business, with a further 64% reporting they were very confident.”

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