First-time buyer market booming

Monday 17 October 2016

CML monthly lending trends show that lending is up 11% compared to a year ago, with first time buyers forming an large percentage of the total market.

First-time buyers are helping the mortgage market remain buoyant, accounting for nearly 42% of the market borrowing 24% up from August last year, with an average income multiple of 3.56 and an average loan size of £136,300. 

The average amount that home movers borrowed increased to £175,000, with an income multiple of 3.27 and an average 71.2% loan to value. 

Paul Smee, Director General of the CML, commented:

"House purchase activity bounced back from a dip in July, reflecting resilience in first-time buyer activity.  Mortgage rates remain at or close to historic lows, and the re-pricing of mortgages following August’s base rate cut should help to underpin a continuing, strong appetite for home-ownership over the coming months."

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David Brown, NAEA Licensed member and CEO of Marsh & Parsons, comments:

“August’s figures from the CML present a picture of a return to normality following the UK’s vote to leave the EU, with homeowner lending up year-on-year and from the previous month. Despite the many uncertainties that still surround which form of Brexit the country will take, for many, the dust has settled and property remains a safe bet.

“First-time buyer growth is also positive and suggests the UK’s enthusiasm and appetite for home ownership has not been dented. It’ll be interesting to see what happens over the coming months with this group: confirmation that the Help to Buy Mortgage Guarantee scheme will end later this year could see first-time buyers clamouring to purchase before then.

“The collapse of the pound also means the UK property market – particularly London, which has long been a favourite for overseas investment – is more attractive. Further falls, as predicted by the Bank of England’s new policy maker, Michael Saunders, are unlikely to change this any time soon adding further demand and bolstering the property market.

“All-in-all the market remains in robust shape, confidence is high and we expect momentum to be maintained throughout the rest of the year.”