First Time Buyer Levels Rise.

by Mark Johnston

First Time Buyer Levels Rise.

First time buyers play an essential role in the housing market by starting off chains that allow other home movers to trade up.

The number of first time buyers entering the housing market reached 216,000 in 2012, which is the highest in 5 years.

According to figures provided by Connells survey and valuation, the number of first time buyers climbed to its highest level during February 2013, which was around 13 per cent more new buyers than the same time last year.

January 2013 was the third consecutive month that first time buyers accounted for 42 per cent of all new mortgages.

Figures from the Council of Mortgage Lenders (CML) show that the number of first time buyer loans has increased by 12 per cent year on year to exceed 200,000, for the first time since 2007.

Recent data from Moneyfacts, the comparison website, also show that mortgage rates across the board have fallen to their lowest levels in 24 years, even for first time buyers with only a 10 per cent deposit.

Ashley Brown, director of independent mortgage broker Moneysprite, stated, “des[ite early doubts about the effectiveness of the funding for lending scheme, it is now the main reason why lenders are offering more competitively priced products and most crucially at the first time buyer end of the market”.

Paul Smee, director general at the Council of Mortgage Lenders (CML), added, “first time buyers, in particular have benefitted from the effects of better funding conditions and the funding for lending scheme. This, along with other factors, confirms that lenders really are open for business”.

Therefore many mortgage experts believe that these figures show that the mortgage market is now becoming more favourable for first time buyers and that these are all further signs that the mortgage drought of the past few years may now beginning to ease.

However, Mark Harris, chief executive of mortgage broker SPF Private Clients, said “let’s not get ahead of ourselves, the mortgage market is still constrained when you compare it with what it was at the height of the housing boom, but it is finally showing encouraging signs of improvement”.

Other figures from the Council of Mortgage Lenders (CML) show that total gross mortgage lending declined to £10.5 billion in February 2013 compared with £11.4 billion in January 2013. Although this figure was up 1 per cent on the £10.4 billion reported in February 2012.

According to Duncan Kreeger of West One Loans, “subdued lending in February suggests that forecasts of total lending across 2013 now look ‘hugely optimistic’”.

Richard Sexton, director of E.Surv chartered surveyors, added “despite lower rates than ever and over 300 new high loan to value mortgages, buying a house remains a pipe dream for most”.

Miles Shipside, director at Rightmove, the property website, also commented that “first time buyer levels remain well below the historic norm of 40 per cent level which is required for a more healthy and active property market”.

Therefore many property experts are demanding that the government acts swiftly to boost the market or else home ownership will remain a distant dream!

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