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Are lower rates driving more FTB transactions?

ended 10. January 2024

A journalist at the Evening Standard is after views from London-based (or surrounds) mortgage brokers and estate agents on whether all these mortgage rate cuts are having a material impact on purchase activity, especially among first-time buyers. Are you seeing more people (particularly FTBs) not just window-shopping but actually buying in the capital at the moment? Are lenders doing enough at higher LTVs or are they too focused on those with a decent chunk of equity/deposit? Any thoughts, whizz them across ASAP as this story could run today.

12 responses from the Newspage community

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Katy Eatenton
Mortgage & Protection Specialist at Eatenton Finance
I’m definitely seeing an increase in movement from buyers, both home movers and first-time buyers. It’s the first-time buyers entering the market that is allowing people to upsize and move on. Lenders are pricing well at all LTVs now and this is really starting to turn window-shoppers in the capital into buyers.
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Andrew Montlake
Managing Director at Coreco
The New Year has bought with it a plethora of new enquiries from first-time buyers who are starting to believe that this year could be a good year to buy. Rather than being “tyre kickers” there is a much more determined air about prospective buyers eager to take advantage of softer prices and rates that, on a monthly payment basis, compare well to ever-increasing rental payments. Interest in our first-time buyer educational sessions we offer to companies across London has already seen an uptick. The biggest issue for many in the capital remains saving for a suitable deposit, and whilst there are some good schemes for first timers out there, such as the Deposit Unlock scheme, Nationwide’s Helping Hand, Halifax’s Family Boost mortgage, or Barclays Springboard mortgage, there is still more that lenders could do to increase availability and reduce the costs of higher LTV mortgages. I expect the first-time buyer market to be a key battleground for lenders this year.
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Justin Moy
Managing Director at EHF Mortgages
Definitely seen a change in the mood of prospective buyers, even those who have had the cheaper rates of the past. A combination of better rates and cheaper prices is definitely helping, we have had more buyer activity than remortgage enquiries this year so far. I would say buyers have become more careful about what they are buying, covering more research and not relying upon the estate agents sales details at face value. If nothing else the last 18 months or so have made everyone better educated around the whole finance and property market than ever before.
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Mike Staton
Director at Staton Mortgages
We are now seeing more First-time buyers than 6 months ago, in fact, for us as a business, 37% of December's business was First Time Buyers compared to 16% in August, therefore our footfall of clients that are FTBs has doubled. This is simply down to increased affordability with rates dropping, inflation easing and a growing confidence among the population in the housing market. We expect to see further increases in First-time buyers this year, especially in May, when I strongly expect the BOE to reduce the Base rate by at least 0.25%. I think 2024 is going to be a prosperous year for first-time buyers
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Ken James
Director at Contractor Mortgage Services
Activity is Up, and this is a mix of remortgage business and home movers coupled with your first buyers so a good mix of people coming back to the market, this is certainly being driven by the sentiment that rates are on the way down and that property prices may start to recover and if demand gets higher then asking prices on homes may start to rise. The market confidence levels have certainly been boosted by all the recent rate cuts and It just has a much better feel to the beginning of this year versus last year. The real question is will this continue in light of the swap rates marginal rises will the good news bubble be close to being popped?
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Jamie Alexander
Mortgage Director at Alexander Southwell Mortgages
I've noticed a notable surge in buyer activity, with both home movers and first-time buyers contributing to the momentum. The influx of first-time buyers is creating opportunities for others to upsize and make their next move. Lenders are offering competitive pricing across all Loan-to-Value ratios, transforming window shoppers in the capital into active buyers. The mood among prospective buyers has shifted positively, even among those accustomed to lower rates in the past.
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Denni Tyson
Mortgage and Protection Advisor at Henchurch Lane Financial Services
This is certainly the case with many first-time buyers now seeking their options with the rate reductions. My clients across Essex and London have now broached the new year with a sense of optimism with the rates lowering. Even those with 5% deposits are seeing the rates slightly improve with a short-term pain, long-term gain attitude.

With the rates now coming down and lenders being flexible with rates and changes before completion, I think first-time buyers are going to be more optimistic than six months ago when purchasing their first home.
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Luke Thompson
Director at PAB Wealth Management
It has been noticeably busier for purchases in the past 6-8 weeks than at any other point since the mini-Budget. Especially in London I have noticed my customers are able to get more of a deal when purchasing a property than they could do previously, which is starting to drive purchases. I feel a big part of this is that customers are scaling back somewhat on their purchase price and have become more accustomed to hearing the rates that are now available. The biggest concern at the minute, especially in London, is down valuations by surveyors as there is definitely a degree of caution in the market.
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Gary Bush
Financial Adviser at MortgageShop.com
The level of prospective property applicants on the streets of London so far in 2024 is a good early indication that the tide has turned. Interest is up considerably. It's too early to hang out the bunting but with new mortgage enquiries also seeing good numbers, the New Year has kicked off well. With lenders all scrambling to offer even lower rates with now bi-weekly decreases quite common, all the ducks are in a row for the capital. Expect a lot more first-time buyer activity in 2024 as mortgage rates continue to edge down.
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Ashley Thomas
Director at Magni Finance
We have seen a large increase in enquires since the new year, with many having offers accepted. It seems that the reduction in mortgage rates and inflation has provided a lot of optimism compared to last year where most were reluctant to move.
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James Bull
Mortgage Broker at JB Mortgages
JB mortgage has many London based clients. Mortgage rates have only been dropping for the last couple of months so it is too early to see the true impact these are having. Early signs are good but we need to be well into 2024 before we will be able to fully understand where the market is going.
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Scott Taylor-Barr
Principal Adviser at Barnsdale Financial Management
Whilst I'm not based in London, many of my clients are looking to buy in or around the Capital. This week I've certainly seen an uptick in first-time buyers seriously enquiring about buying their first property in 2024; I think many feel more confident now that interest rates are in the news due to them falling, rather than rising, albeit they are often then surprised when we talk about rates around 5% rather than the 4% deals they've been reading about, mainly due to their deposit being less than the 40% required to get the very lowest cost mortgage deals often cited in the new stories.