FTB mortgage products reduce by more than a quarter

First-time buyer mortgage products reduced by more than a quarter

The latest research from estate and lettings agent, Barrows and Forrester,reveals that the number of first-time buyer mortgage products has fallen by more than a quarter since the end of Q1 2023.

Barrows and Forrester analysed UK mortgage interest rates and product availability across multiple industry sources between and how this availability has changed since the start of the year, to reveal how the ongoing mortgage crisis is impacting prospective homebuyers.

The cost of mortgages is rising rapidly. The Bank of England recently forecasted that monthly repayments will increase by as much as £500 for current homeowners, but how is this crisis, which is being driven by rising interest rates, impacting people who want to take out mortgages today, especially those who are buying for the first time?

The research – which covers the four mortgage categories of buy-to-let, remortgage, first-time buyer, and moving home – reveals that buy-to-let mortgages have seen the largest interest rate increase since the end of Q1, rising by 0.81% to sit at 4.5%. This is currently the highest interest rate across all four categories.

The cost of remortgage products has increased by 0.24% to sit at 4.03%, while first-time buyer and remortgage rates have risen by 0.23% and 0.03% respectively.

But while first-time buyers will feel a glimmer of hope to have received the second-lowest rate increase, they may still find themselves in a difficult situation due to the fact that the number of products available to first-timers has seen the biggest reduction of any category.

A -25.6% reduction since the end of Q1 means there are currently an estimated 412 first-time buyer products on the market, by far the lowest offering across all four categories.

The most products are currently available for moving home mortgages (2,270) despite recording a -15.9% decline since the end of Q1.

Remortgage products stand at a healthy 2,207 despite recording the biggest drop of -16.2%.

Managing Director of Barrows and Forrester, James Forrester, commented:

“Depending on what you’re trying to achieve, you’re going to face a variety of different challenges as a buyer in today’s market. For example, first-time buyers are going to be severely restricted by the small number of products available to them which will prevent many from securing a mortgage.

Lenders appear much more comfortable providing variety for those who already have a foot on the ladder, but even they are having to deal with cost increases and a significantly reduced selection of products.

If the mortgage crisis deepens in the coming months, things could get even harder for buyers, but the silver lining is that, while tough, the current situation isn’t as severe as the market turmoil experienced in the 90s and more recently, 2007.”