First-time buyer activity remained strong in March with the number of first-time buyers increasing by 20 per cent according to data published today by the Council of Mortgage Lenders.
This increase, as well as small rise in the number of home movers, contributed to a monthly jump in house purchase lending. Remortgage lending also increased compared to February but remained flat over the first quarter.
First-time buyers
A total of 19,100 loans (worth £2.4 billion) were advanced to first-time buyers in March, up from 15,900 loans in February but down on the 24,400 loans advanced in March last year. However, March 2012 marked the end of the first-time buyer stamp duty holiday and resulted in a significant jump in activity, making meaningful year-on-year comparisons difficult.
Despite the spike in March last year, first-time buyer lending activity over the first quarter of 2013 fell only marginally shy of activity in the first three months of 2012. Overall, 50,900 loans were advanced to first-time buyers in the first quarter of this year, compared to 51,200 loans in the first quarter of 2012.
While the loan-to-value ratio for first-time buyers remained at 80 per cent, there has been a gradual increase in the proportion of first-time buyers taking out loans with a deposit of 10 per cent or less. In the first quarter of the year 1 in 4 first-time buyers put down a deposit at 10 per cent or less – up from 1 in 5 in the first quarter of last year. First-time buyers also typically borrowed a slightly larger amount in March than in February, both in absolute terms and relative to their income.
First-time buyers also continued to account for an increasing proportion of all house purchase loans – increasing to 45 per cent in March from 43 per cent in February.
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