First-time buyer numbers up 8% in February

Lending to both first-time buyers and home movers increased in February with first-time buyers taking the bigger increase, according to figures released today from the Council of Mortgage Lenders.

Some 14,100 loans worth £1.7bn were taken out by first-time buyers, up 8% by number and 6% by value from January and up 18% by number and 21% by value on last February.

Home movers took out 22,500 loans worth £3.7bn, a 2% increase in number and a 3% increase in value from January and a 16% increase in number and 19% increase in value from February 2011.

House purchase lending rose in February – 36,600 loans – worth £5.4bn, were taken out, up 4% by number and 2% by value from January and up 17% by number and 20% by value from February last year.

Remortgaging continued to decrease in February, some £3.3bn was advanced, a 6% fall compared both to January 2012 and February 2011.

For the first time since April 2011, there was an increase in the proportion of income first-time buyers spent on mortgage interest payments, from 12.1% in January to 12.5% in February.

Since the summer of 2011, more than 95% of first-time buyers have taken out repayment loans and February’s proportion was 96%, unchanged from January.

Repayment loans to new home movers and remortgagors also increased in February from 81% to 82% for home movers and from 76% to 77% for those remortgaging.

Some 51% of first-time buyers bought properties priced between £125,000 and £250,000 in February, up from 49% in January.

February was the last full month of the Stamp Duty concession although next month’s data is expected to bring a further rise in first-time buyer numbers as they moved to beat the 24 March deadline.

Paul Smee, director general of the CML, says: “It is encouraging to see the continuing year-on-year improvement in house purchase lending.

“However it is not yet clear whether the end of the stamp duty concession will lead to a falling off in first-time buyer numbers and how much this may be offset by the government’s NewBuy scheme, available to all buying a new build property.”