Number of first-time buyers stay stable: CML

The number of loans to first-time buyers stayed stable in April compared with the previous month, supporting newly published data that the Mortgage Market Review and property supply are succeeding in slowing down the housing market.

Data published by the Council of Mortgage Lenders revealed the number of loans to first-time buyers rose by 1 per cent month-on-month to 24,500, however it was 37 per cent more than April 2013.

By value, lending to first-time buyers was up 3 per cent on March to £3.5bn, 52 per cent more than in April last year.

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The CML stated first-time buyer affordability worsened “fractionally” in April, with first-time buyers typically borrowing 3.42 times their gross income, compared to 3.41 in March.

The typical loan size for first-time buyers was £121,500 in April, up from £118,750 in March and represented the highest monthly average advance for first-time buyers on record.

Data released today (12 June) by the Royal Institution of Chartered Surveyors revealed the national supply of new homes coming onto the market declined for the fifth consecutive month in May and in London, where fears of an overheating market have been particularly expressed, demand for new homes fell for the first time since June 2012.

Respondents to the latest Rics’ residential market survey also reported banks are lending less, with the average loan-to-value ratios among first-time buyers dropped to 85.3 per cent, from 86 per cent in April.

Respondents’ expectations for house prices over the next 12 months dropped from 3.9 per cent to 3.6 per cent - the lowest since December 2013.

Paul Smee, director general of the CML, said: “First-time buyers and home movers continue to be key drivers in the growth of the market and, despite fears that MMR preparations may hinder this momentum, we have seen a continued year-on-year upward trend every month in 2014.

“The UK picture continues to mask a disparate set of varied local conditions, but overall we expect lending levels to continue to build on the foundation of growth we have seen over the past 12 months.”