Light at the end of the tunnel for First Time Buyers as lending increases
The Council of Mortgage Lenders (CML) announced a significant rise in the number of first time buyers in the UK for the first time in the last six years
They reported that the number of first time buyers rose by 12% last year – the highest number since 2007. While the Office for National Statistics (ONS) also reported a rise in average house proses in the UK of 3.3% last year.
“the number of first-time buyers rose by 12% to 216,000″ (CML)
“UK house prices rose by 3.3% last year.” (ONS)
“property sales rise by 4th month in a row” (RiCS)
This picture of a confident property market emerging from a previously stagnant market is backed up by the Royal Institution of Chartered Surveyors (Rics), whose latest survey showed property sales rising for the fourth month in a row since October 2012.
Cause for celebration?
Maybe not yet, but is is good news that lenders are extending more mortgages to first time buyers as this has a positive effect on the housing market as a whole
Why this upturn now?
Mortgage Lending has been boosted by the Funding for Lending Scheme, which was launched by the Bank of England in August 2012. The aim of the scheme is to boost overall lending in the UK by some £60bn stirling. Under the scheme Banks and Building Societies are offered access to cheap funds, on condition they then lend it down to customers.
The effect has been to gradually improve the flow of funds to home buyers, including those who had been unable to borrow because they did not have a large enough deposit to put down.
According to the CML some first-time buyers have found it easier to get mortgages, even if they only had a deposit of 5- 10%. They commented “one in 40 first-time buyers took out a 95% mortgage compared with less than one in 100 a year earlier. And around one in five first-time buyers borrowed 90% or more”
Other positive signs
HM Revenue and Customs (HMRC) reported that completed sales rose by 5% last year to 932,000, the highest level of sales since 2007.
The Bank of England reported that the number of mortgages agreed but not yet lent by lenders for home buyers but not yet lent rose in December for the fifth month in a row. This is a good indicator of upcoming house sales.
55,785 mortgages were approved in December – the most since January 2012 and, before that, the highest since December 2009.
If you are looking for property, whether you are a first time buyer or not, please visit our property search section on our home page.
If you would like to talk to us about putting you property on the market please call and speak to our sales team on 020 7394 1160
Filed under: House and Home, News, Property market
