An Improvement in First Time Buyer Numbers!

by Mark Johnston

An Improvement in First Time Buyer Numbers!

The number of first time buyers able to get themselves a footing on the property ladder has been something of a sore point in recent times, with the fall of the market in 2007 and 2008 building a hurdle that many have struggled to battle over ever since.

However a recent survey of lenders  found that their ‘risk appetite’ is returning and they are planning to make mortgages more readily available and hand out more low deposit deals in the coming months. 

first time buyers 1So it seems that banks and building societies have become more willing to offer loans to borrowers with small deposits the number of first time buyers rose to its highest level in May this year since 2007.

Therefore news that lenders are opening their doors to borrowers with small deposits will be welcome to those struggling to build enough savings to get on the housing ladder at a time when prices in some areas of the country have started rising again.

A big factor behind the growth in the number of first time buyers has therefore been the return to higher loan to value (LTV) lending, fuelled in part by the government’s Funding for Lending scheme.

Recent research has revealed that for some months, there has been an increase in the number of first time buyers entering the market with smaller deposits, this has now resulted in a shift in the average first time buyer loan to value ratio rising to 83 per cent, up from 81 per cent in April 2013 and the highest ratio since November 2008.

According to the Council of Mortgage Lenders (CML), a total of 25,100 loans were granted to newcomers to the property market during June, a 29 per cent increase on April’s figure and up by 42 per cent on May 2012.

The value of borrowing by first time buyers is also at its highest level for more than five and a half years, and up by 54.5 per cent on May 2012, at £3.4 billion.

Separate figures from chartered surveyors e.surv tell a similar story they suggest that the number of borrowers with deposits of less than 15 per cent was up by 47 per cent year on year in June, reaching its highest level since the financial crisis.

Paul Smee, the director general of the Council of Mortgage Lenders (CML), said: “Both the borrowing appetite of first time buyers and the availability of attractive mortgages for them, have improved markedly since a year ago.”

Richard Sexton, director of e.surv chartered surveyors, also added that “the first time buyer market is alive and kicking again and confidence is returning to the housing market.”

So it seems that all these figures are the latest in a series of signs that the housing market is finally recovering.

Nevertheless analysis of the first time buyer market does shows that these figures are still below historic standards.


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