The number of first-time buyers getting mortgages increased significantly in January, suggesting that uncertainty in the property market over Brexit isn't deterring people taking their first steps to the property ladder.
More than 25,000 first-time buyers got a mortgage within the first month of 2022, according to banking trade body UK Finance.
This comes at any given time where Brexit has cooled house prices, giving first-time buyers more hope of finding an affordable property.
Which? examines the pros and cons of taking out a mortgage before the UK leaves europe as well as utilizing a broker when looking for an offer in your dream first home.
First-time buyer mortgage rise and house prices plateau
According to UK Finance, there have been 4.6 times more and more people getting a home loan in January compared to the same month this past year, which amounts to around 25,100 new first-time buyers.
In a lift for brand spanking new buyers, property portal Rightmove reports the typical cost of property visiting market in March rose by just 0.4% (+lb1,287), the cheapest average monthly rise at the moment since 2011.
This month, average prices fell by 1.1% working in london to lb607,557 compared to February as the capital housing industry appears to be hardest hit by Brexit.
Read more: In the event you buy a house before Brexit?
Benefits of having a mortgage before Brexit
For first-time buyers having a small deposit, now appears to be a great time to take out a home loan weight loss lenders are reducing the price of 95% mortgages even while other products increase in price.
Last month, Which? reported the typical rate on the 95% mortgage has came by a lot more than 0.5% in 6 months, currently clocking in around 3.4%.
Moreover, first-time buyers with less money happen to be boosted with a growing trend of lenders offering first-time buyer mortgages with no upfront fees.
Which? analysis of Moneyfacts data shows 40% of first-time buyer mortgages now come without any arrangement fees, up by 25% in the same period this past year.
| Number of deals available to first-time buyers | Number of deals that come with a fee | Number of deals that are fee-free | |
| March 2022 | 3,099 | 1,987 | 1,112 |
| March 2022 | 3,616 | 2,222 | 1,394 |
We also analysed Moneyfacts data to find the best fee-free mortgages open to first-time buyers with small deposits.
Here are the most useful two-year fixed-rate 95% LTV mortgage deals that include no fees.
| Lender | Initial rate | Revert rate (SVR) | APRC | Lending area |
| Progressive Building Society | 2.79% | 5% | 4.74% | Northern Ireland |
| Barclays Mortgages | 2.88% | 4.24% | 4.1% | All UK |
| Skipton Building Society | 2.89% | 4.99% | 4.7% | England, Scotland, Wales |
Downsides of having mortgage before Brexit
Kate Faulkner, housing expert and founder of propertychecklists.co.uk, said that ‘there has been stagnation on the market over the last year in areas such as London, the South and East, which had overheated and this slowdown has spread with other areas over the last few months.
‘Buyers are now definitely holding back in the hope that prices will fall. But it's not only demand that's dropping – supply is, too, with lots of people battening down the hatches until there exists a clearer picture of what is going to happen. This can limit any expectations of a reduction in house prices, but also mean that few move, as there's little choice on the market for would-be sellers to buy.’
Faulkner states that ‘buyers should not be put off by fears of the house price crash as long as they mitigate the chance of it happening due to economic shocks.
‘If you purchased a property now, even when it did drop in value for the short term, the marketplace will likely have corrected itself when you come to move (assuming you are going to stay there for at least 5 years).
‘However, if you're considering buying somewhere for a while it's more complicated. Transactions are likely to drop over the next couple of months and it is entirely possible that interest rates could jump back to their pre-credit crunch levels of 6% to 7% if your no-deal Brexit causes issues.’
Should first-time buyers make use of a large financial company?
According towards the Home Owners Alliance, 89% of first-time buyers used a home loan broker in the first quarter of last year.
A broker, or adviser, will obtain a suitable mortgage for you according to your individual financial situation.
They can help you save time by suggesting which lenders will probably accept you and how to improve your application, and may speed up the process by coping with paperwork.
They also provide use of thousands of mortgage deals that are only accessible to intermediaries.
It is important to determine whether your large financial company is whole-of-market or is only going to recommend deals from the select panel of lenders.
See our full guide to: Choosing a mortgage broker
