Has the mortgage crisis deterred FTBs?

In a harmonious move, major lenders including Santander, Halifax, NatWest, HSBC, First Direct, and TSB are orchestrating a reduction in fixed mortgage rates, that will no doubt propel easier affordability for aspiring homeowners. With these imminent rate cuts, the British housing market is poised for another exciting time over the next 6-12 months. The allure of lower borrowing costs is expected to encourage potential buyers, both homeowners and landlords alike.

Mortgage rates across these major lenders are falling by nearly 70 basis points, making property ownership that much more accessible to a broader demographic. We remain cautiously optimistic, hoping that this trend marks the start of a period of favourable mortgage rates. However, while the market takes a sigh of relief, all eyes are now on the Bank of England and how it beckons any potential imbalance between inflation and interest rates in the next MPC meeting.

I am still seeing high demand from first time buyers, in fact around 80% of the mortgage business I do is people buying their first home. I believe this is due to the fact that the market in Leeds is still generally good and in most cases when the client checks the monthly payments, they are still lower than expected

In quarter 4 of 2022 with the Liz Truss mortgage debacle, at JB Mortgages we found that first-time buyer activity on mortgages seemed to pretty much stop. There seemed to be a wait-and-see attitude to mortgage rates and most were hoping they would drop back to previous levels. Now we are well into 2023 there seems to be an acceptance that higher interest rates are here to stay for the next couple of years at least, so first-time buyers are back in the market. People ultimately still need somewhere to live, and the dream of home ownership has certainly not gone away.

The part of the equation that always gets missed is that homebuyers have no option but to suck it up and pay what it costs to buy when we have a massively disfunctional rental market. Rents continue to skyrocket, tenancies are insecure, demand continues to increase and good quality available homes to rent are like hens teeth. Compared to that, buying even at a higher cost now still wins for most people we speak to.

As market conditions have become more difficult we've seen a retreat from the market by FTB's. They are unsure about buying whilst prices are falling and interest rates are rising. In my opinion now is actually a golden opportunity for FTB's to access the market. In a time of uncertainty pricing a property becomes much more difficult, meaning that sellers are more likely to be open to offers. FTB's also play a key role in underpinning the market as they are chain free and so much more easily proceedable than home movers who have a property to sell. This means that a FTB may be favoured over an applicant who has a property to sell but is not yet under offer, even though they may have put in a lower offer.

We've definitely seen some resilience from first-time buyers. This group are determined to get onto the housing ladder and will still buy the right property.

Affordability conversations are critical, but with a deposit often supported by the bank of mum and dad, and in many circumstances not much difference in the mortgage payment to their rent payment, getting on the ladder is still desirable for lots.

In Scotland, perhaps down to our lower average prices, first-time buyer activity has remained fairly robust throughout these turbulent times with properties across all areas up to circa £200k remaining very much in demand as a first foot on the ladder for many

Scottish government intervention in the rental market has inadvertently driving rental prices up by a higher rate than in most other parts of the UK and the supply of rental opportunities is severely limited so it remains the case for most that buying their first home is still significantly more cost-effective and desirable than renting

The ambition to leave the safety of the family home remains a strong pull for many and whilst affordability for some has been challenged by the recent rate volatility, in most instances this has not proven to be an insurmountable hurdle and with 5% deposit options readily available, it seems likely that FTB activity will continue to spark and perhaps even fire up the rest of the market

some FTB are waiting for the proverbial price crash, but we are still getting a lot of enquiries for this type of loan. People still want to buy either way and it a FTB can pass the affordability checks, they will go for it.

I've actually seen first time buyers least affected as they have no pre conceptions of mortgage and rates, well unless Auntie June sat down the Labour Club smoking her pack of Woodbines tells them in her days the rates were 17th. The biggest barrier is still deposit for FTBs but with New Build companies chucking these away as incentives and plenty of 5% deposit deals it may be an excellent time to find your first home. Every mortgage is advised on budget and this advice has still not change since Auntie June got her