First-time buyer numbers at highest level for five years

Alex Johnson

0ac7e43b48eb1ee9ab8ee5ba406223c9dc8e28bd 300x201 First time buyer numbers at highest level for five years216,200 first-time buyers became homeowners in 2012, according to new figures released today from the Council of Mortgage Lenders (CML), making it the first time the total has exceeded 200,000 since 2007. This represents a year-on-year rise of 12% on 2011 when 193,000 loans were made.

Meanwhile, figures also out today from the Office of National Statistics, suggest that in December 2012, prices paid by first-time buyers were 2.7% higher on average than in December 2011. For owner-occupiers (i.e. existing owners) prices increased by 3.5% over the same period.

A total of 19,100 loans were advanced to first-time buyers in December 2012, a 12% drop compared to November but up by 3% on the same period in 2011. By value, loans to first-time buyers were £2.4 million, a 11% fall on the previous month.

However the total for the last three months of the year shows that lending to first-time buyers strengthened. There were 60,500 loans made between October and December 2012, worth £7.6 billion. This was an 8% increase over the previous three months and up by 14% compared to the same period in 2011.

Overall, in the October-December period, first-time buyers accounted for 42% of all house purchase lending, higher than the typical 38% rate. 1 in 40 first-time buyers took out a 95% mortgage compared with less than 1 in 100 a year earlier. Around 1 in 5 first-time buyers borrowed 90% or more.

“Despite the seasonal dip in lending that we normally see in December, the underlying trend for year-on-year increases in house purchase activity continued in 2012,” said CML director general Paul Smee. “First-time buyers, in particular, have benefitted from the effects of better funding conditions and the Funding for Lending scheme, with the number of new people moving into home-ownership in 2012 reaching the highest level for five years. This, along with other factors, confirms that lenders really are open for business.”

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