Figures from the Council of Mortgage Lenders show that 9,400 loans were made to first-time buyers this February – significantly less than the 17,400 seen in February 2008.
The number of mortgages also went up, with the number of purchase loans reaching 24,300 in February compared with 23,400 loans in January.
But while the number of loans went up the value of loans in both January and February stayed the same at 3.1bn.
Remortgaging activity declined steeply, with 35,000 remortgage loans made in February – down from 44,000 in January.
The CML expects demand for remortgaging to remain muted as lenders’ SVRs are attractive compared with new mortgage pricing. Michael Coogan, director-general of the CML, says: “We are not convinced that underlying trends have shifted sufficiently to alterour forecasts for mortgage market activity in 2009.
“But there are positive signs for later in the year.”
Lee Bramzell, chief executive of PropertyIndex.com, says: “Although there can be no instant fix to the tough situation we are in, this is compelling evidence that market prospects are beginning to look up.”
The CML says that around 900,000 home owners are in some degree of negative equity, but around two-thirds face only modest shortfalls of less than 10%. This equates to around 6,000 for first-time buyers in negative equity.