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First-time buyers return to the market in May – Twenty7tec

  • 05/06/2024
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First-time buyers return to the market in May – Twenty7tec
Searches for mortgages for first-time buyers rose in May, hinting at a recovery in activity, analysis from a sourcing system provider showed.

The Twenty7tec monthly mortgage market report found that searches for first-time buyer options accounted for 18.3% of queries on the platform, a rise from 15.4% in April. 

This was despite the quieter period, which saw a 17% fall in total mortgage searches month-on-month. Twenty7tec attributed this to the two bank holidays during the month, as well as the Bank of England holding rates and the announcement of a general election. 

The number of mortgage products on the market rose by 805 to a high of 22,300 deals. 

Nathan Reilly, director at Twenty7tec, said: “Looking at the broader picture, 2024 has been an incredibly hot market for mortgage searches year to date – up one million searches on our systems compared to the same period last year.

“Lenders also have confidence in the market, with more products available than ever before. We also have more products with max loan to values (LTVs) of 95%, 85%, 80% and 75% than ever before.”


Borrower behaviour 

Excluding product transfers, there was a 50:50 split between searches for purchase products and remortgage. This was the second consecutive month the balance was essentially equal. 

Searches for purchase mortgages declined by 8% month-on-month, but was 7.16% higher when compared to the same month last year. Remortgage searches fell by a steeper 25.24%, but this was relatively unchanged compared to 2023. 

Broken down by buyer type, searches for residential purchase loans declined by 8.37% in May when compared to April, but this was 7.8% higher than a year earlier. 

Remortgages for residential deals fell by 29.21% on a monthly basis, but annually this was up by 3.32%. 

Although they made up a larger share of activity in May, the number of searches for first-time buyer deals was 2.86% down compared to April but 1.86% higher than the same month last year. 

Buy-to-let (BTL) purchase mortgage searches fell 7.15% month-on-month, but were 6.12% up annually. 

Searches for BTL remortgages dropped by 18.55% from May to April and were also down by 6.13% on the previous year. 

James Tucker, CEO of Twenty7tec, said: “A general election announcement, two bank holidays, and the Bank of England holding rates in May 2024 seem to have dented activity a little. 

“Remortgage activity in particular is down compared to the prior month. 

“However, some promising signs remain in the return to form of first-time buyers, who are increasingly being helped onto the ladder by builder gifts for deposits, and by the highest ever number of mortgage products available.” 


Small move towards longer-term fixes 

There was a slight fall in the share of searches for mortgages fixed for two years or shorter, making up 45.6% of queries in May compared to 48.5% in April. 

Two-year fixed mortgages accounted for 45.63% of all fixed product searches, compared to a share of 48.51% a year earlier. 

Searches for 3-5-year fixes made up 34.1% of queries, relatively unchanged from a share of 34.09% last year. 

Meanwhile, queries for 5-10-year fixed rate mortgages accounted for 20.28% of searches, up from 17.4% in 2023. 

Reilly said this was a sign that “buyers increasingly want price certainty, it would seem.” 

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