by Mark Johnston
First Time Buyers at High Levels.
A large number of mortgage lenders have already reduced their rates substantially in recent months and this is largely due to the fact that lenders are now able to access cheap finance through the governments funding for lending which was launched in August last year.
Although it now seems that competition in the mortgage rate war looks set to increased in the next few months as mortgage lenders revealed in a recent bank of England survey that they intend to push their rates down even further.
Figures from February this year show that a total of 16,400 loans were advanced to first time buyers, which is a 17.1 per cent increase when compared to figures from February 2012.
It appears then that first time buyers accounted for 43 per cent of all mortgage loans in February this year, thus meaning that this was the sixth consecutive month that the indicator has been above the 40 per cent mark.
According to the Council of Mortgage Lenders (CML) the number of first time buyers in the first two months of this year was at its highest level in 5 years.
Paul Smee, director general of the Council of Mortgage Lenders (CML), said “first time buyers are continuing to take advantage of more favourable market conditions, helping to drive the underlying resilient house purchase lending”.
In March this year the Chancellor, George Osborne, used the budget in order to offer further stimulus to the housing market, through the ‘help to buy’ scheme.
Therefore industry experts hope that the new initiatives announced by the government will further aid first time buyer activity.
Mark Harris, chief executive of mortgage broker SPF Private Clients, suggested “mortgage availability is easing for those with more modest deposits, a trend set to continue when the help to buy initiative come in to force next year”.
However, there are concerns in some quarters that the help to buy scheme risks supporting a ‘bubble’ in house prices.
Recent research also shows that activity in the UK housing market has hit a 3 year high.
Chartered surveyors handled an average of 17.4 home sales over the last 3 months, which is the highest number recorded since March 2010. Many surveyors also said that demand has improved, as a net balance of 11 per cent reported rises in enquiries from new buyers, according to the latest survey by the Royal Institution of Chartered Surveyors (RICS), an industry body.
Peter Bolton King. a director at the Royal Institution of Chartered Surveyors (RICS) added “a buoyant, healthy property market is central to economic recovery and while these are still very much early signs, it is encouraging that sales are beginning to pick up. The increase in potential buyers getting out there and viewing property is particularly encouraging”.
All in all first time buyers remain the lifeblood of the housing market so therefore it is really crucial for the housing markets overall health that their numbers continue to improve.
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