First Time Buyers Loans Hit 7-Year High

First Time Buyers Loans Hit 7-Year High

More first-time buyers are getting onto the housing ladder than at  any time since 2007, mortgage lenders said today.

Mortgage lenders made 28,600 first-time buyer loans in June, 7% more than the previous month and the highest since November 2007, according to the Council of Mortgage Lenders. By value, banks and building societies lent £4.2 billion to those taking their first step on the ladder, the highest amount since August 2007.

Loans to other homebuyers also grew over the month but at a slower rate, increasing by 4% to 31,900 as the market cooled slightly in response to tighter mortgage restrictions introduced at the end of April, as well as higher anticipation of interest rate rises from the Bank of England.

CML director general Paul Smee said: “For the second month running since new rules took effect, lending characteristics remain similar to the market beforehand.

“We now feel confident that, as we would hope, the mortgage market review effect is more gentle dampener than hard brake.”

The CML’s figures showed affordability for first-time buyers little changed with buyers borrowing  3.47 times their income. They borrowed an average £123,865 in June, up from £121,500 in May. Record low interest rates meant payment burdens remained relatively low in June, at 19.3% of gross income. Over the second quarter as a whole, there were 79,900 first-time buyer loans — 24% up on the same period a year earlier.

Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “The lending market remains strong, suggesting that the impact of the mortgage market review has not been detrimental.”

To paraphrase Harold Macmillan, the former Prime Minister “Conveyancing solicitors in London have never had it so good!”

Original reporting by the London Evening Standard 11/8/14

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