First-time buyers record
More mortgages were handed out to first-time buyers in June than in any other month since 2007, banks and building societies have reported.
People taking their first step on the property ladder took out 34,300 loans for house purchase in June with a total value of £5.5bn - marking a 24 per cent leap in the number of loans compared with May and 17 per cent more than in June 2015.
The report from the Council of Mortgage Lenders shows the June figure is the highest for first-time buyer lending since 35,300 loans were handed out in August 2007.
Existing home-owners who were moving house took out 33,900 loans in June, up 28 per cent on May and 0.3 per cent on the same month a year earlier. June was the third month running that the number of first-time buyer loans being handed out was running at a higher level than the number of home-mover mortgages. This trend had not been seen previously for 20 years.
The cut in the Bank of England base rate to 0.25 per cent last week could mean some first-time buyers find they can get cheaper mortgage deals in the coming months, although experts have also warned that low savings returns will make it harder for aspiring first-time buyers to build a deposit.
The CML’s figures mostly reflect the housing market in the run-up to the referendum, with the vote taking place on June 23. They also show that lending to buy-to-let landlords showed signs of recovering in June, after a three percentage point stamp duty hike for this sector was imposed on April 1.
Some 6,000 loans were handed out to those purchasing buy-to-let properties in June, marking a jump of one third (33 per cent) compared with May. But the figure is still 42 per cent lower than it was in June 2015.
Paul Smee, director-general of the CML (pictured), said: “These figures reveal growth in house purchase activity and in particular for first-time buyers. As ever, there is uncertainty and it will take more time and patience to understand how the market will evolve in the current environment - these figures predominantly cover activity in the run-up to the referendum.
“We still believe that the mortgage market is well capitalised, resilient and open for business, and will remain so for the foreseeable future.”