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First-time buyers lending at highest level since 2007

Lending to first-time buyers has hit its largest quarterly total since 2007 with 68,200 purchasing their first home in the second quarter of 2013, according to new figures.

Data from the Council of Mortgage Lenders (CML) shows 25,300 loans were advanced to first-time buyers in June, a 30% increase on the 19,400 loans advanced in June last year.

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 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.

This is likely to be associated with the growth in house prices in recent months – in June 34% bought a home less than £125k, down from 37% in May.

First-time buyers accounted for 46% of all house purchase loans in June, which was up from 44% in May and considerably higher than the 38% seen on average since 2007.

Paul Smee, director general of the Council of Mortgage Lenders, said: “First time buyers have become a strong driver in the growth of mortgage lending this year proving that market conditions are favourable for them.  

“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.” 

Lending to home movers continued to grow on a year-on-year basis. A total of 30,100 loans were advanced to home movers in June, a 6% increase compared to June last year. The value of these loans totalled £5.1bn.

For the second quarter of the year overall, 83,500 loans were advanced to home movers which was an increase of 27% on the first quarter of 2013 and up 4% on the second quarter last year.

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