First time buyer lending reaches six year high

The number of mortgage loans given to first-time buyers this October was the highest since November 2007, new data from the Council of Mortgage lenders has revealed.

There were 26,800 loans to first-time buyers in October, an increase of 16% on September and up 33% compared to October 2012.

The loans added up to £3.7bn which represented an increase of 16% compared to the previous month and an increase of 48% on the same month last year.

Lending for home-owner house purchase also increased in October, up 17% compared to September and up 24% on October last year.

In total, 60,800 loans were advanced in October with a total in value of £9.7bn.

The represented an increase of 17% on September this year and a year-on-year monthly increase of 33% making it the second highest monthly lending amount for home-owner house purchase since November 2007.

Loans advanced to home movers for house purchase was 33,900 in October, up 19% on September and up by 16% compared to October 2012.

Home mover loans totalled £5.9bn in October, representing a 16% rise on September and a 23% increase compared to October last year.

Home-owner remortgage activity declined in October with a total of 28,300 remortgage loans. This was down 12% compared to September and a 3% fall compared to October last year.

These loans totalled £4.2bn in value, a decrease of 11% on September but up 14% compared to October 2012.

Lending for buy-to-let increased in October with 16,200 buy-to-let loans advanced, which was up 11% in volume compared to September. The value of these loans totalled £2.1bn, which was an increase of 10.5% from September.

Paul Smee, director general of the CML, said: “After years of a relatively flat mortgage market, 2013 has shown signs of lending turning a corner and looks set to finish the year strongly.

“Increased financial optimism among the public as the economy recovers seems to be driving this upward trend and it is welcome to see that first-time buyers continue lending momentum as more look to own their first home.”

Harvey Harding

Harvey Harding

Head of private client services at PM Law Solicitors
Head of private client services at PM Law Solicitors in Sheffield
Harvey Harding
Harvey Harding
Harvey Harding
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