The UK mortgage market has seen a significant shift in 2020, with the average first-time buyer (FTB) mortgage loan increasing to £215,800. This is according to a report from First Direct, the online banking division of HSBC.
The report found that the average FTB loan had increased by 8.2% since 2019, with the average loan size for FTBs now standing at £215,800. This is the highest level since records began in 2008, and is significantly higher than the £198,000 average loan size in 2019.
The report also found that the number of FTBs taking out mortgages had increased by 12.7% in 2020 compared to 2019. This is due to a number of factors, including the stamp duty holiday introduced by the government in July 2020, which has made it easier for FTBs to purchase a property.
The report also found that the average loan-to-value (LTV) ratio for FTBs had increased from 75.9% in 2019 to 79.2% in 2020. This means that FTBs are taking out larger mortgages relative to the value of the property they are purchasing.
The report also found that the average interest rate for FTBs had decreased from 2.68% in 2019 to 2.45% in 2020. This decrease in interest rates has helped to make mortgages more affordable for FTBs.
Overall, the report from First Direct shows that the UK mortgage market has seen a significant shift in 2020, with the average FTB loan increasing to £215,800. This is due to a number of factors, including the stamp duty holiday and lower interest rates, which have made it easier for FTBs to purchase a property.