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First time buyers boost mortgage lending in June with 24% more buyers

Mortgage lending by value to first time buyers increased 24% over the month following a poor first half of the year, says CML.

The Council of Mortgage Lenders (CML) latest data shows first time buyers loans by value increased by 24% helping to boosting overall homeowner mortgage lending by 22% month on month.

Paul Smee, director general of the CML, said the competitive mortgage rates mean first-time buyers are paying the lowest ever proportion of their income on the cost of their capital and interest loan, 18.2% in June down from 19.3% this time last year.

The number of loans to first-time buyers in June was 28,300 and value of £4.2 billion with loan to values decreased to 80% with a deposit  of 20% and multiples remain similar at 3.4 times income.

However, over the year there was no change by value for first time buyers loans and the number of loans actually decreased by 2.4% compared to June last year.

Other buyers also more active

CML’s report also shows that remortgage buyers and home movers experienced a significant rise in homeowner loans.

Remortgage buyers by loan value increased by 34% to £5.2 billion over the last year to June and this is 31% higher than May figure.

The number of remortgage loans in June was 31,600 increasing by similar proportions and could be due to homeowners switching to a new cheaper mortgage deal helping to reduce the cost of monthly repayments.

For home movers the value of loans has increased by 26% in the last month to £ 6.4 billion with the number of loans higher by 21% to 32,700.

The average loan size for home movers has increased slightly to 164,605 with a loan to value slightly higher at 73%. Deposits are slightly lower at 27% indicating home movers are borrowing more to move up the property ladder.

Buy-to-let mortgages performed strongly

Gross lending to buy-to-let landlords increased 26% by value to £3.4 billion for the month to June and is 54% higher compared to June last year.

Buy-to-let lending has outperformed both homeowner loans and house purchases over the last year accounting for 17% of lending in June. The recent performance has been driven by landlords remortgaging than new purchases.

The CML report shows total mortgage lending for June at £20.1 billion higher by 25% month on month and 13% up on June last year.

Overall for June loans to homeowners for house purchases accounted to 54% of the lending market while remortgages accounted for 25%.

Paul Smee of CML said the increase in activity in remortgage activity for homeowners may reflect an increased desire to lock into competitive mortgage deals before any increase in interest rates suggested by the Bank of England later this year.

For older homeowners there is higher activity with equity release buyers accessing money in their property using a lifetime mortgage to help maintain their standard of living.

What are your next steps?

Call our LCM mortgage brokers if you are a buy-to-let landlord with a property, remortgaging and want the best mortgage deal, buying your first home or you are planning to move home.

For equity release buyers our London City Mortgage advisers can recommend lifetime mortgages allowing you to receive cash from your home to spend on anything such as a gift to a family member or even help your children start or expand a business.

Learn more by using the mortgage cost calculators, property value tracker chart and equity release mortgage calculator. Start with a free mortgage quote or call us and we can take your details.

Use your dashboard to access online mortgage quotes, money off vouchers and start your mortgage application online 24/7 on desktop, tablet or smartphone.

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    Equity Release may involve a Lifetime Mortgage or a Home Reversion Scheme. To understand the features and risks, please ask for a personalised illustration. Equity Release may affect your entitlement to means tested state benefits and will impact on the size of your estate. For Equity Release London City Mortgages charge a fixed fee upon completion of £695. For Mortgages a fixed fee is charged on application. Typically this is from £295 up to £495 for the services selected.


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