First-time buyer demand rising, mortgage lenders say
- 11 October 2013
- From the section Business
Demand from first-time house buyers is continuing to rise, according to lenders, with a 33% increase in home loans in August from a year earlier.
Some 27,100 loans were advanced to those taking their first step on the property ladder in August, an increase of 7% on the previous month.
The Council of Mortgage Lenders (CML) said remortgaging levels dropped, with many on low variable interest rates.
But it said low fixed rates could bring "stability" for many borrowers.
"[This increase] is indicative of more confidence in the market," said Paul Smee, director general of the CML.
"The high number of borrowers, in particular first-time buyers, opting for fixed rates reflects the attractive pricing currently on products which can provide helpful stability to borrowers for the next few years."
No summer slowdown
Mortgage brokers said that August was generally a slow month for the housing market, with people concentrating on their holidays rather than house-hunting.
However, this summer saw a trend of growing activity in the housing market.
This was driven, in part, by the Bank of England's Funding for Lending scheme, which offers cheap funds to lenders under the condition that it is used for lending to individuals and businesses.
Interest from first-time buyers is expected to continue to pick up. The first products have been offered under the second phase of the government's Help to Buy scheme.
This is aimed at borrowers who can afford mortgage repayments, but are only able to put down a deposit of 5% of the home's value.
Lenders representing more than 50% of the UK mortgage market have signed up to offering Help to Buy products by January at the latest.