First-time buyers are driving mortgage market
14th February 2014
First-time buyers have been “driving the mortgage market forward” in the past year, according to the Council of Mortgage Lenders (CML).
The number of loans made to first-time buyers was up by 23% in 2013 compared with 2012 and the total number of loans to first-time buyers reached 268,800, the CML said.
However, the total amount of money borrowed by homeowners last year was still less than half of that seen at the peak of the housing boom in 2007.
First-time buyer numbers picked up strongly towards the end of the year, which the CML said was healthy for the market as a whole.
“Good housing market recoveries start because first-time buyers re-enter the market,” said Paul Smee, director general of the CML.
The group’s figures show that people were borrowing a greater multiple of their income in 2013 (3.33 times) than they did the previous year (3.26 times).
“The overall sector was made up of a series of local, or regional, markets, and there was little sign of a housing bubble outside of the south east of England,” Mr Smee continued.
“The CML are keen to see more homes being built to reduce some of the pressure that are pushing up prices.”
Overall, the number of mortgages advanced for house purchases was up 11% in 2013 compared with the previous year.
New rules that come into force in April mean that mortgage applicants are likely to be asked more questions and provide more evidence to prove that they can afford repayments, even if interest rates do rise.
Andrew Montlake, Director at Coreco commented, “We have really seen an uplift in enquiries from 1st Time Buyers over the past few months which is always an encouraging sign. Many are more determined to get onto the housing ladder this year whilst mortgage rates are low and before house prices rise even further, especially in the high demand areas of London.
“The good news is that more lenders are offering more products with smaller deposits, with schemes such as Help To Buy helping other lenders to offer their own 90% and 95% LTV products. The only sticking point is still the lack of available property and whilst demand still outstrips supply by such a margin, prices look set to continue to rise.”
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Andrew Montlake, Director and Spokesperson for Coreco, gives his honest and forthright views on the mortgage market, economy and all things property related. Monty was voted "Mortgage Personality of the year 2008", "Best Press Spokesperson" in 2011 and is the current holder of the British Mortgage Awards “Best Marketeer” title. Expect expert analysis, delivered in a down to earth style with a side helping of exuberance.