The busiest
opening quarter since the Crash and how first-time buyers still need help
In
the lead-up to the EU Referendum, the mortgage market has been quietly chugging
away in the background.
So
much so, that e.surv’s Mortgage Monitor has claimed that the market has
actually had its busiest start to the year since 2007.
In
Quarter 1 of this year, 71,710 mortgages were granted, meaning it was the
highest opening quarter in nine years, despite the market slowing slightly in
February and March.
Landlords
stole much of the headline space throughout February due to the changes in
Stamp Duty, which led to a surge in buy-to-let mortgages being taken out in
order to try and beat the arrival of the new additional charge in April.
March,
however, saw first-time buyers take the reins for market activity, with the
lending of mortgages of over 85% loan-to-value accounting for 17.1% of all
mortgages sold, which was an increase of 1.4% on the previous month.
With
the hike in the Bank of England base rate looking further off as the weeks go
by, first-time buyers are utilizing the current record low mortgage rates and
lenders are returning the favor with the number of mortgage products available
being at its highest ever.
Does
this mean that the housing crisis is solved?
Far
from it. Many people, particularly aspiring first-time buyers, would have been
watching Chancellor George Osborne’s Budget in March with the hope that he
would offer a helping hand to the growing number of hopeful home-owners that
are struggling to get onto the property ladder due to rising house prices.
Unfortunately,
that’s not what he offered.
Yes,
the Lifetime ISA was a step in the right direction, but it doesn’t particularly
help aspiring buyers with their more urgent requirements.
And
with Help to Buy expected to end in December this year, the government needs to
urgently devise a plan in order to avoid having an influx of aspiring
home-owners getting stuck in the rental sector come 2017.
The
fact that Q1 of this year saw the most activity since 2007 should give the
market and the government the confidence that there are willing buyers out
there.
But,
until the lack of housing supply is addressed directly, those willing buyers
may lose their inclination to continue saving and waiting for their own home,
choosing to rent instead.
Jeremy
Morcumb is from Mortgage Advice Bureau Swindon – for further information call:
01793 611400
Email:
jeremym@mab.org.uk or visit: mortgageadvicebureau/swindon
Your home may be repossessed if you do not keep up repayments on your mortgage.