First time buyer mortgage approvals dropped in September

The number of new first-time buyer mortgages dropped by 4.5 per cent in September, driven by a slump in consumer demand due to affordability constraints in London and the south east.

New home mover mortgages fell by 8.6 per cent compared to last year, with a decline in value of 5.8 per cent year-on-year, according to research by trade body UK Finance. 

The volume of first time buyer mortgages and home mover mortgages recorded in September dropped to 29,400. 

Buy-to-let mortgages dropped by 18.8 per cent to 5,200 and decreased in value by 22.2 per cent to £700m.

UK Finance director of mortgages Jackie Bennett said: “Overall remortgaging for both residential and buy-to-let properties have levelled out after a period of strong growth. This reflects the number of fixed rate loans reaching maturity.

“Buy-to-let home purchases have eased again in September, suggesting lending in this market remains subdued as a result of recent tax, regulatory and legislative changes.

“Demand for house purchases for both first-time buyers and homemovers has also lessened, as affordability constraints continue to bear down on consumer demand for new loans particularly in London and the south east”.

Commenting on the latest figures, mortgage expert at online mortgage broker Trussle Dilpreet Bhagrath said: "The market is looking subdued at the moment as a lot of financial pressure is putting new buyers off and many people are reluctant to buy and sell properties until the Brexit deadline has passed.

“What is positive is that remortgaging numbers are only fractionally down from last year, despite fewer people moving home this year. "

Private Finance director Shaun Church added: "Compared to the summer rush, September saw the mortgage market settling into a slower pace of activity. Both new loans and remortgages have declined as we start to approach the traditionally quieter winter season.

"This winter may be harsher than others given consumer confidence has taken a knock from political uncertainty and rising interest rates – but the market is still relatively resilient."