According to research from First Direct, which analysed data from CACI, this is more in line with figures from 2021, when the value of first-time buyer applications added up to £24.7bn.
The report added that the value of applications was the strongest value for first-time buyer growth since the mini Budget in September 2022.
In February alone, the value of first-time buyer loans reached £11bn, which has not been seen since 2016. This is nearly double the value of the market in February 2023, which came to £5.6bn.
The report noted that first-time buyer mortgages in February came to 49,982, which is the highest monthly figure since March 2022.
The first-time buyer segment made up around 35% of the total new business mortgage market value in Q1, with homemovers making up 34% and remortgages coming to 31%.
The average first-time buyer loan value in Q1 was £215,000, with figures rising to £219,340 in February, which is an 8% year-on-year (YOY) increase on the same month last year.
‘Positive start to the year across the mortgage market’
Liam O’Hara, head of mortgages at First Direct, said that it had been a “positive start to the year across the mortgage market”, with first-time buyer applications ahead of homemovers and remortgages.
He continued: “The month of February was the main contributor to these encouraging figures, accounting for nearly 50% of the total value of first-time buyer mortgage applications for the quarter.”
“If we cast our mind back to the New Year, we saw most mortgage providers reduce mortgage rates considerably in response to reduced swap rates. The positive impact of this was seen across the market, with first-time buyer mortgage applications flooding in across February.”
O’Hara said that the appetite for homeownership “remains consistent, with aspiring homeowners acting fast in order to secure competitive rates”.
He continued: “This shows the resilience of first-time buyers, even in a higher rate environment, and the desire to get on the ladder driving the category to dominate the market when it comes to volume.”
O’Hara said that there were a number of factors influencing loan value, but overall an increase was a “positive sign that mortgage affordability is increasing and that people are in a position to borrow more”.
“A factor could be that first-time buyers are applying for mortgages with smaller deposits as opposed to necessarily opting for more expensive houses, although the data shows only a marginal increase in people opting for higher LTV mortgages of 90% and above, compared to the same period in 2023,” he explained.
