First time buyers increase by 20%


The Council of Mortgage Lenders has said that the number of fist time buyers has increased by 20% from 15,900 in February this year to 19,100 in March.

The CML says there has been a gradual increase in the proportion of new borrowers coming forwards amid signs that banks and building societies are becoming increasingly willing to offer larger loans.

A total of 19,100 home loans worth £2.4bn were advanced to new buyers during the month, up from 15,900 in February.

First-time buyers accounted for 45% of house purchase loans in March, up from 43% in February.

The number was down 21% on March 2012, but that month marked the end of a stamp duty holiday on properties costing up to £250,000, which led to a flurry of activity as buyers sought to avoid the tax.

While the average loan-to-value for first-time buyers remained at 80%, the CML said there had been a gradual increase in the proportion of new borrowers taking on larger loans.

Recent weeks have seen a flurry of mortgage rate cuts by lenders, including on higher loan-to-value deals, and the figures suggest first-time buyers are being tempted into the market.

Since March, there has also been the introduction of the government's new Help to Buy scheme to assist those with small deposits that went live in early April, and the extension of the Funding for Lending scheme, designed to offer cheap funds to lenders.

Data from surveyors suggests that these schemes are leading to an increased demand for property, which could filter through to increased lending in the coming months.

The CML's director general, Paul Smee, said the fact that the quarterly figures almost matched those recorded in 2012 "suggests that the market continues to be favourable for those looking to buy their first home".

He added: "More borrowers are taking out higher loan-to-value mortgages than any other time in the last four years – a sign that lenders are open for business, and that borrowers, even those without a large deposit, are increasingly able to get a foot on the property ladder."


  • Date posted:
    20/05/2013
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