Lending to first-time buyers in June was up 30% year-on-year and the Council of Mortgage Lenders says the second quarter of this year was the highest quarterly total for lending since 2007. The trade body’s data shows that 25,300 loans were advanced to first-time buyers in June a 30% increase on the 19,400 loans advanced in June last year. And overall for the second quarter some 68,200 first-time buyers purchased their first home, the highest since 2007.
First-time buyers continued to increase the amount they borrowed – with an average loan size of £117,000 in June up from £112,500 in May. As a result of this there has been a stronger growth in the value of loans advanced to first-time buyers which totalled £3.5bn – an increase of 9% in value compared to May and 40% on June last year.
The CML says that this increase in first-time buyer, along with growth in lending to home movers, has resulted in a jump in total house purchase lending.
A total of 151,600 loans was advanced for house purchase in the second quarter, up by 30% compared to the first quarter of 2013 and 17% compared to the same period last year. In June, £8.5bn worth of loans was advanced which was an increase of 16% compared to June last year.
Remortgage lending dipped back in June compared to May, although continues to trend above levels earlier this year. While it was up 13% year-on-year, the number of remortgages fell by 13.6% from May this year.
CML director general Paul Smee, director general of the Council of Mortgage Lenders, says first-time buyers have become a strong driver in the growth of mortgage lending this year proving that market conditions are favourable for them. He says: “With increased interest in home buyers’ ability to cope with the eventual rise of interest rates, it is particularly reassuring to see borrowers choosing to fix their payments and for longer in record numbers.”