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Saturday 15 December 2018

Mortgage lending boosted as first-time buyers get foot on the ladder

A rise in lending was driven by first-time buyers.

First-time buyers have been securing funds for their first home (PA)
First-time buyers have been securing funds for their first home (PA)

By Helen Cahill, Press Association City Reporter

Lending for home purchases was given a boost in May as more first-time buyers secured funds to buy a property, figures from a trade association show.

There were 32,200 new first-time buyer mortgages granted in May, up 8.1% year-on-year, according to figures from UK Finance.

The total value of new lending was £5.4 billion, a rise of 12.5% compared to the same month a year before.

UK Finance said the average age of a first-time buyer was 30, with a household income of £42,000.

Jackie Bennett, director of mortgages at UK Finance, said: “The mortgage market is seeing a pre-summer boost, driven by a rise in the number of first-time buyers and strong remortgaging activity.

“It is also particularly encouraging to see an increase in homemovers, after a period of relative sluggishness in this important segment of the market.”

However, she said the buy-to-let market remained “constrained” by regulatory tax changes.

There has been a weaker mortgage lending trend in the buy-to-let sector following the introduction of a stamp duty hike for second home owners.

There were 5,500 new buy-to-let mortgages completed in the month. By value, this represented £700 million, down 22.2% year-on-year.

Jonathan Samuels, CEO of the property lender, Octane Capital, said: “May’s lending data is a perfect snapshot of the sea change in the property market in recent years.

“First time buyers are in the ascendancy while amateur landlords are beating a fast retreat.”

Shaun Church, director at mortgage broker Private Finance, said that efforts to help “Generation Rent” were starting to have an effect.

Mr Church added: “Easing house price growth matched with government initiatives such as stamp duty relief and Help to Buy have given prospective homeowners a much needed helping hand on to the housing ladder.

“Competition within the mortgage market is also helping to boost first time buyer numbers, making mortgages both attainable and affordable.”

Press Association

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