First-time buyers benefiting from low April rates: CML figures

Money

First-time buyers are being quick to take advantage of competitive rates, according to the latest lending figures from the Council of Mortgage Lenders.

This group borrowed £4.1bn in April, down 16 per cent on March but up 8 per cent on April 2016.

They took out 25,400 loans, down 18 per cent month-on-month but up 2 per cent year-on-year.

CML director Paul Smee says: “April comparisons are distorted by the weakness last year following the stamp duty changes, and the normal seasonal lending surge in March. But the seasonally-adjusted picture shows lending relatively unchanged month-on-month across all lending segments.

“Heading into the summer months, we expect the market to remain slightly lopsided. Buy-to-let and home movers may well remain subdued, as they have been for the last six months.

“But both first-time buyer and remortgage lending should maintain momentum on the coattails of the attractive deals available.”

Buy-to-let saw month-on-month decreases, down 17 per cent by value and 16 per cent by volume.

One 77 Mortgages managing director Alastair McKee says: “”The market is less lopsided than one-sided. Against a backdrop of cheap loans, Help to Buy and significantly reduced competition from landlords, first-time buyers are having a field day.

“With many landlords still reeling from the raft of tax and stress-testing changes, first time buyers see an opportunity and are taking it.”

Legal & General Mortgage Club director Jeremy Duncombe says: “Despite the announcement of a snap General Election, appetite for lending to first-time buyers remains resilient, as does the demand from these borrowers to get onto the housing ladder.

“A combination of low interest rates and a determination to make the most of the current record-low deals available has seen this group of buyers benefit.”

In total, homebuyers borrowed £9.6bn in April, down 14 per cent on March but up 19 per cent on April 2016.

The non-seasonally adjusted figures show this came to 51,200 loans, down 16 per cent on March but up 9 per cent on April 2016.

Meanwhile, homemovers borrowed £5.5bn, down 11 per cent on March but up 28 per cent year-on-year.

This equated to 25,700 loans, down 15 per cent month-on-month but up 17 per cent compared to April 2016.

Home-owner remortgage activity was down 16 per cent by value and 18 per cent by volume on March.

Compared to a year ago, remortgage lending was down 15 per cent by value and 16 per cent by volume.