Gross mortgage lending to FTBs falls by 7% in 2020

14 Jul 2021

Number of new mortgages taken our down by almost 13%

COVID-19 has had a major impact on the market in 2020/21, deterring some FTBs from buying a home but also leading the Government to introduce a Stamp Duty holiday, which encouraged strong buying demand ahead of the ending of the holiday.

In 2020, IRN Research estimates that first time home buyers (FTBs) borrowed 7.2% less to purchase their first homes, compared with 2019, mainly due to the impact of COVID-19. In 2020, the number of new mortgages taken out fell by 12.6%, again the decline reflecting the impact of COVID-19 on the market. At the end of December 2020, FTBs collectively owed £289 billion on outstanding mortgages, which represented a 7.1% growth over the amounts owed at the end of 2019.  These findings come from the IRN Research Report First Time Mortgage Buyers, Market Trends Report 2021.

Growth in FTB mortgage advances expected

Given the likely course of the UK economy and the UK housing market, IRN Research estimates that between 2020 and 2025, the number of mortgage advances by FTBs will rise by 15.1%, while gross annual mortgage lending rise by 39.8% This trend, however, masks an expected sharp rise in the FTB market in 2021 due to the SDLT holiday and increased ability of individuals to view properties, followed by two more subdued years as the market adjusts to a more normal operating environment.  Growth will return from 2023 onwards.

About the FTB mortgages report

The First Time Mortgage Buyers, Market Trends Report 2021 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. It focused on particular on the impact of the COVID-19 pandemic on the market.

The report (43pp, PDF), is available directly from IRN Research, priced at £200.

See more information about the report

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IRN Team

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