First-time buyers ‘need more support’

A fall in the number and value of mortgage deals taken out by first-time buyers in May is a sign this group needs more government support.

This is the view of Andy Knee, chief executive of property service firm LMS, commenting on the latest market statistics from the Office for National Statistics and the Council of Mortgage Lenders.

Knee said that May’s figures showed some respite for first-time buyers. “Prices paid by existing homeowners increased by almost 6% year-on-year; on the other hand, the first-time buyer market saw a slightly smaller increase of 5.1%,” he explained.

“And rise in the average income of first-time buyers, as reported by the CML, is a further boost to their prospects as we enter the summer season.”

However, Knee added, the number and value of first-time buyer loans was down from May 2014. This was “an indication that more still needs to be done to support prospective homeowners” he said.

“Increased supply and more affordable housing also remain critical to ensuring stability within the market.”

Knee said that while remortgaging as a whole was down from the previous month, it still accounted for more than half of activity in the buy-to-let sector.

He added: “We may see an upward trend here in the future as landlords look to mitigate the reduction in interest tax relief following the emergency Budget. By remortgaging, buy-to-let landlords can ensure they have the best deals on the properties in their portfolio.”