Based on data from CACI, First Direct’s first-time buyer market snapshot, there were around 41,236 first-time buyer applications in June 2023.
This is 10,000 more than the month before, a rise of around a third, equal to around £8.8bn in total application value. This is the highest peak since June 2022 when the first-time buyer market value reached £9.5bn.
The home mover and remortgage market came to around £9.9bn and £10.3bn respectively.
The total combined market was just under £29bn, which is the highest combined value since September. This was below £31.8bn in June last year but higher than £28.4bn in June 2021.
Chris Pitt, CEO of First Direct, said: “The June mortgage market figures were very positive after a subdued start to the year. Those high volumes showed that there continues to be a significant appetite for home ownership, even in an environment where rates are higher.
“However, we also know that July was a more volatile month than June when it comes to mortgage rate fluctuations, and the data suggests this had a knock-on effect on mortgage application volumes across all categories.”
In July, first-time buyer applications fell to 25,663, with total application value decreasing to £5.1bn which is around a 42 per cent drop month-on-month.
The home movers category contracted by 40 per cent in volume month-on-month and 45 per cent in value, while remortgages experienced a 42 per cent dip in application volume and 45 per cent reduction value.
Pitt added: “The impact of swap rates being in flux in July has led to a reduction in mortgage applications, which suggests some people may be delaying house purchases due to market conditions.
“The third quarter of the year is usually a busy time but sees slightly lower volumes than the period between March and June, so it will be interesting to see how this period impacts volumes for the rest of the quarter.”
The average value of first-time buyer loans dropped to £199,890, a six per cent fall month-on-month and the first time the loan size has fallen £200,000 since January.
The report continued that average loans had been on a “steady upward trajectory since January”.
Home movers’ average loan value has dropped nine per cent month-on-month to £233,714 in July and in the remortgage segment, the average loan value has reduced by five per cent month-on-month to £205,206.
“The trend we saw in the first few months of the year was conflicting with House Price Index data – there was a gradual increase in lending despite a static housing market. This trend has now reversed, and we’re seeing a sharp dip in loan values and borrowing overall. This suggests that the volatility around rates meant people were borrowing less, either by opting for cheaper properties or by putting down larger deposits in order to secure cheaper rates.”
