According to market analysis from First Direct, mortgage applications made by those wanting to get onto the property ladder totalled £4bn in January. This was up from £3.5bn in December and a 17% uplift.  

The first edition of this analysis revealed that the total value was down on last year January, however, when the 31,308 applications made amounted to £6.4bn. 

Carl Watchorn, head of mortgages at First Direct, said: “It’s promising to see an uptick in the mortgage application market overall after a quiet quarter, with overall applications passing the £12bn mark for the first time since October 2022.  

“It’s particularly encouraging to see first-time buyer applications – crucial to a vibrant housing market – reach their highest volumes since October. These are still relatively small numbers compared to some of the peaks we saw last year, but an upwards trend nonetheless.”  

Drop in average loan sizes 

First Direct said there was a slight dip in the average loan value. 

According to the lender, the average first-time buyer loan was £194,582 in January. Annually, this was lower than last year’s £203,919 average and significantly lower than the peak in May 2022 which was recorded as £216,602. 

The average loan required by a prospective homeowner was less than that of an existing homeowner, which stood at £241,129. This was also down on a peak of £277,811 recorded in May 2022. 

The average remortgage loan size came to £202,500. 

Watchorn added: “The reduction in average loan size for first-time buyers will be influenced by a number of factors. For some, cost-of-living pressures may be resulting in customers having neither the appetite or ability to borrow amounts as high as previously they may have. For others, the recently-seen trend of falling house prices may mean some customers require lower levels of borrowing to take those first steps on to the housing ladder. 

“Last year, we saw a large increase in average loan value between January and February, so it’ll be interesting to see if we see a similar uptick this year.” 

A larger market share 

First-time buyer applications exceeded those from homeowners in January for the first time in two years. During the month, applications from first-time buyers held a 32% share compared to the 31% accounted for by homeowners. 

In November and December, first-timers took up 31% of applications which was slightly higher than in the preceding three months.