More Opportunities for First Time Buyers.

by Mark Johnston

More Opportunities for First Time Buyers.

Recent months have seen a flurry of mortgage rate cuts by lenders, including on higher loan to value deals, and the figures suggest first time buyers are being tempted into the market.

Mortgage availability has increased sharply and lenders have been slashing their rates since the Government launched its Funding for Lending scheme last August.

Ray Boulger of John Charcol, the mortgage broker, said: “Rates for borrowers with the largest deposits have already fallen, so lenders are likely to focus on those with smaller deposits, namely first time buyers.”

A survey has suggested that the number of first time buyers has increased by 15 per cent over the past year.

Figures show that a total of 19,100 home loans worth £2.4 billion were advanced to new buyers during the march.

Then in April this year, the Council of Mortgage Lenders (CML) reported the highest number of first time buyers entering the market for five years.

David Newnes, a director of LSL Property Services says “Transactions among first time buyers increased significantly in April, as an improvement in the availability of high loan to value mortgages allowed more first time buyers to realise their dreams of home ownership,”

It seems then that first timers have been helped by lower borrowing costs, and a wider choice of mortgages.

Also according to new figures from the Building Societies Association (BSA) the number of loans  offered to first time buyers rose by around 50 per cent.

In the first five months of this year the building societies arranged almost 9,000 of t loans with a 10 per cent deposit.

Paul Broadhead, the head of mortgage policy at the Building Societies Association (BSA) said: “Building societies and other mutual lenders continue to play a dominant role in supporting members of the public looking to buy a new home.”

Richard Sexton, director of chartered surveyors e.surv “Lenders are coming out of their shells and supporting first-time buyers”.

Data shows that several lenders have recently launched market leading deals for first time buyers of late.

The average two year fixed rate deal for those with a 10 per cent deposit has tumbled from 5.44 per cent to 4.5 per cent over the past year and the average five year rate has also dropped for those with 10per cent deposits from 5.65 per cent to 4.83 per cent over the same period,  according to Moneyfacts, the data firm.

It therefore appears then that there has been a significant rise in people making their first purchase meaning more first time buyers are realising their dreams.

However, recent analysis of the current mortgage market reveals that just one year ago, there were 62 deals available for people with a 5 per cent deposit, many of whom would be first time buyers. But one year on that number has dropped to 54 products, equating to 1.9 per cent of all the mortgages on offer.

Sylvia Waycot, editor at, said that “little has actually changed for many people looking for their first mortgage. It might have all been very different had Funding for Lending been specific in ensuring lenders lent higher Loan to Values (LTV).

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