Demand for new-build homes is driving a boom in house building with construction growing for the fifteenth consecutive month.

The rise in first time buyers securing mortgage loans to 28,600 or 47% of all mortgage lending is helping to drive a boom in the construction of new-build homes in the UK property market.

Mortgage borrowing is also at a high of £4.2 billion increasing from £3.3 billion from June last year. First time buyers now have to find a larger deposit of £30,966 up £1,716 from June last year.

Housing building boost for construction

A buoyant property market driven by first time buyers has increased construction industry confidence resulting in a surge in house building, now rising at the fastest rate for a decade.

Construction output has increased by 1.2% in June after declining in May. Over a year output is higher by 4.8% but remains 10 below levels reached in 2008 before the start of the financial crisis.

The Office of National Statistics (ONS) has said house building output which is based on the charge to customers buy the builder was higher by 1.9% month on month and up by 17.9% over the year.

The lack of suitable properties on the market at an affordable price for home movers has resulted in many continuing to rent and save for a bigger deposit.

Help to Buy schemes making the difference

Both first time buyers and home movers have benefited from the government's Help to Buy scheme.

The scheme promotes homeownership rather than renting property and is not available to switching remortgage buyers or buy-to-let landlords.

The scheme requires only a small deposit of 5% with either an interest free equity loan from the government for 20% of the property value or a mortgage guarantee scheme where 15% of the property value is guaranteed by the government.

Data from the Council of Mortgage Lending (CML) shows the borrowing multiple for first time buyers has increased slightly from 3.33 times for June 2013 to 3.47 now.

The scheme has increased confidence with lenders more willing to lend, introducing more products to the market and requiring smaller deposits as low as 10% with competitive interest rates including fixed rate mortgages.

Help for first time buyers can come from family members as the equity release buyer can access money using a lifetime mortgage gifting the deposit for a home to children or grandchildren.

What are your next steps?

Call our LCM mortgage brokers for advice if you are a first time buyer, want to remortgage your existing home for the best mortgage deal, moving home or are a buy-to-let investor.

For equity release buyers our London City Mortgage advisers can recommend lifetime mortgages allowing you to receive cash from your property for home  and garden improvements, holidays or even gift to a family member or friend.

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

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