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First Time Buyers UK Market Trends Report 2019

  • ID: 4843061
  • Report
  • Region: United Kingdom
  • 46 Pages
  • IRN Research
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  • Barclays Group
  • HSBC Group
  • Lloyds Banking Group
  • Nationwide
  • RBS Group
  • Santander
  • MORE

In 2018, the author estimates that FTBs borrowed almost £60 billion to purchase their first homes, 4.4% more than in 2017. In 2018, the number of advances rose by 1.9%. In 2019, the author estimates the value of FTB mortgage advances will rise further by 4.3%, while the number of loans will rise by 2.4%. At the end of 2018, FTBs collectively owed over £250 billion in outstanding mortgages, which represented a 6.8% growth over the amounts owed at the end of 2017

The First Time Buyers Market Trends Report 2019 is the second edition of the author's First-Time Buyer Market Trends Report. This report updates and extends information contained in the first edition, published in July 2018. Like the first edition, this report outlines the broad trends and developments amongst first-time buyers (FTBs), who are defined as consumers who have arranged and taken out a mortgage on the first home they have owned within the last year. The report focuses on the latest developments and market drivers of the FTB mortgage market, the market size and the future of the market in the coming five years.

FTBs face mounting obstacles to buy their first homes, including house prices rising faster than incomes, a lack of house building, rising rental costs and more stringent lending criteria on mortgages.

In response to these problems FTBs have:

  • Increasingly stretched mortgage terms
  • Been more willing to buy jointly even if they are unmarried
  • Exploited the opportunities to borrow on higher-income multiples
  • Sought to buy in lower-cost markets
  • Relied more heavily on financial support from family and friends
  • Used Government financial support schemes, which have allowed FTBs to buy more expensive properties and to buy at an earlier age than otherwise would have been the case.

Despite these problems, the author estimates that between 2019 and 2023, the number of mortgage advances by FTBs will rise by 23.3%, while the amount borrowed each year will rise by 38.9%, to reach over £80 billion in 2023. This will see the average advance in 2023 rise to £191,504 compared with £169,879 in 2019.

The UK mortgage market has been slow to adopt new technologies. However, many in the industry now believe that an automatic, integrated (i.e. seamless) customer journey is now possible using artificial intelligence, open banking and digital ID verification technologies. This does not mean human interaction between consumer and broker or consumer and lender will be eliminated, rather it means many of the underwriting and case processing activities will be automated.

Note: Product cover images may vary from those shown
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  • Barclays Group
  • HSBC Group
  • Lloyds Banking Group
  • Nationwide
  • RBS Group
  • Santander
  • MORE

1. Introduction

  • Abbreviations

2. Executive Summary

  • Almost a £60 billion market
  • High concentration downstream
  • Buying is still problematic despite Government help
  • The industry responds
  • The FCA tries to spur innovation
  • Technology to play a growing role in the market

3. Market Structure

  • The key market participants
  • The Six Stages of an FTB’s Customer Journey
  • Mortgage Lenders
  • Mortgage Brokers

4. Market Developments and Drivers

  • It’s a problem to get your foot on the property ladder
  • Despite some easing of the pressure in 2019
  • But over time, FTB home prices have risen faster than house prices as a whole
  • It’s hard for FTBs to buy without financial support, especially in London
  • Leading many to believe they will never buy a home
  • FTBs act to get as much from their mortgages as possible
  • The industry responds
  • The Government tries to help
  • Help to Buy Equity Loan Scheme
  • Help to Buy: mortgage guarantee
  • Help to Buy ISA: over 100,000 properties purchased
  • Help to Buy: Shared Ownership
  • The government adjusts Stamp Duty Land Tax (SDLT) for FTBs
  • Mortgage Market Review tightens lending criteria.
  • And has possibly stifled innovation
  • FCA calls for better access to information

5. The Key Players

Nationwide the market leader in 2018

  • Lloyds Banking Group
  • Nationwide
  • RBS Group
  • Santander
  • Barclays Group
  • HSBC Group

6. Market Size And Trends

  • Introduction
  • Over £57 billion advanced in 2018
  • At the end of 2018, FTBs owed over £250 billion
  • FTBs account for around 24% of new advances

7. The Future

  • An uncertain future
  • Forecast assumptions
  • The Forecast
  • Technology to play a growing role in the market
  • Land Registry active in promoting digital mortgages

8. Associations

List of Figures
Figure 1 The structure of the mortgage market
Figure 2 The relationship of house prices to average earnings (September each year), England and Wales
Figure 3 The relationship of mean UK house prices to mean UK average earnings*, 2018-2019
Figure 4 The trend in average UK house prices, 2012-2019
Figure 5 FTB costs of buying a home without Government support (£000)
Figure 6 The percentage of first-time buyer mortgage sales by LTV ratio
Figure 7 The terms on FTB mortgages ( FTBs who took out a mortgage over 2016-218)
Figure 8 The percentage of FTB mortgages taken out by location of the property
Figure 9 Trends in Help to Buy: Equity Loan Scheme Usage, England 2013-2019
Figure 10 Financial profile of FTBs using the Help to Buy Equity Scheme 2013-18*
Figure 11 No and value of property completions December 2015 to March 2019
Figure 12 The average age of FTBs
Figure 13 First Time Buyers’ Tax Relief
Figure 14 The main brand/provider shares in the FTB market (estimated % of mortgages advances), 2018
Figure 15 The FTB mortgage market advances*, 2009-2019
Figure 16 The FTB mortgage* market balances outstanding (year-end), 2008-2018
Figure 17 The importance of FTBs to the UK mortgage* market, 2008-2019
Figure 18 The FTB mortgage market*, 2019-2023

Note: Product cover images may vary from those shown
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  • Barclays Group
  • HSBC Group
  • Lloyds Banking Group
  • Nationwide
  • RBS Group
  • Santander
Note: Product cover images may vary from those shown