Lenders report increase in first-time buyer loans
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Lending to first-time buyers is on the rise, according to the latest lending survey from the Bank of England.
Using data compiled by the Council of Mortgage Lenders and the Bank’s own Lending Panel data, the latest Trends in Lending survey says gross mortgage lending until the end of October has been buoyed by an increase in lending to first-time buyers.
CML figures show that home movers are also contributing to the recent rises in gross mortgage lending.
The uplift in first-time buyer numbers is supported by a separate housing market survey from the Royal Institution of Chartered Surveyors.
It found that a net balance of over 25% of those polled saw an increase in the number of new enquiries from first-time buyers over the three months to August.
The Bank says that first-time buyer data could potentially include some buyers who have owned property before but are no longer owner-occupiers.
But it also points to estimates from the CML which suggest that these types of buyers have tended to not be a large proportion of the total.
Lenders told the Bank that recent initiatives to lend at higher LTVs and family assistance with deposits were helping to boost lending to first-time buyers.
Andrew Montlake, director of brokerage Coreco Group, says: “There has been a noticeable rise over the autumn months in the number of first-time buyers applying for mortgages.
“There is clearly an appetite to buy before prices become further out of reach.
“The estate agents we deal with are reporting that there hasn’t been the usual dip in demand at this time of the year, which is doubtless a reflection of this.”
Lenders also reported that in October approvals for house purchase rose to around 61,000, from some 56,000 in September.
But the Bank cautions that the volume of housing transactions was still low by historical standards.
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