Market sees return of FTB confidence

According to the survey, the percentage of first time buyers rose to 40% in August, an increase of 3%, the highest level this year. Correspondingly, the percentage of high loan to value mortgages also increased slightly to 22%, as first-time buyers borrow more to get a foot on the ladder.

Steve Cox, operations director of Spicerhaart Financial Services, commented: “It is encouraging to see these early signs of the first-time buyer share picking up again, as these buyers are a vital driving force in the housing market.

“With property price growth finally cooling and stabilising in some areas, first-time buyers appear to be confident in their financial security. They are looking to buy before prices start to go up again.

“The increase of first-time buyers is occurring in spite of RICS figures indicating that getting on to the housing ladder is the hardest it has been since 1990, suggesting that buyers are still determined to own their own property, even if it means borrowing slightly more or accepting help from their families.”

The Spicerhaart Financial Services survey also shows that the percentage of borrowers opting for variable mortgages increased for the second consecutive month in August, rising to 19% up from 14% in July. Products tracking the base rate were chosen by 16% of borrowers, the highest percentage since this time last year.

Although fixed rate products remained the most popular, with 81% of customers opting for these in August, the take-up of all fixed rate mortgage products decreased slightly. The proportion of fixed four to five year products dropped the most, falling from 17% to 14%.

Cox added: “This further increase in uptake of variable mortgages, confirms that a growing proportion of borrowers are starting to believe that interest rates have finally peaked, or will do so shortly. The Bank of England has announced that their base rate rises have slowed house price growth and brought inflation back down to 1.9% and this has instilled consumers with a new found cautious confidence.

“Borrowers believing that the interest rate will decrease again in the shorter term, bringing down product prices, do not want to lock themselves in to a longer term fixed rate mortgage at today’s higher rates. Instead, people are hedging their bets and opting for tracker mortgages.”