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First-time buyer mortgage share rising

First time buyer7

First-time buyers (FTBs) currently have a bigger share of the mortgage market than at any time since records began, new figures from the Bank of England (BoE) reveal.

The official data indicates that 22 per cent of all home loans granted in the third quarter of 2016 were to people buying their first house. This is the largest share tracked by the BoE since it began recording the data in 2007.

Across the October to December period, the total value of new mortgages in the final quarter was £62.8 billion, which is a marginal fall of 0.4 per cent compared to the fourth quarter of 2016, but offset by a surge in FTB activity as new people stepped onto the housing ladder.

Rising trends

The data correlates with separate figures published by the Council of Mortgage Lenders (CML), which showed that first-time buyers borrowed £3.6 billion for homeowner house purchase in January.

This is up nine per cent on the figure recorded in January 2016. In total, FTBs took out 22,600 loans in January, which is down 29 per cent month-on-month, but up seven per cent year-on-year.

The rise in first-time buyer mortgage activity has been attributed to a number of initiatives that are encouraging new house purchases.

Lifeblood of the market

Property financer Anderson Harris said: “First-time buyers are the lifeblood of the market and with lenders offering a range of high loan-to-value deals, as well as more innovative products where family members can help offspring onto the ladder, it looks as though this trend will continue.

“Encouragingly, things have picked up in the first quarter of this year, with a number of people keen to get on with buying and selling.”

It comes after figures published by the BBC showed that the Help to Buy equity loan has played a key role in enabling many young couples and families to take their first steps onto the property ladder and others to move up it.

The figures reveal that a third of new build homes outside of London are bought with the aid of the Help to Buy scheme.

BBC England’s data unit shows that Help to Buy loans were used to purchase 76,559 homes outside of London between April 2013 and April 2016, which is equivalent to 30% of the 255,960 privately built new properties completed in that period.

When all households across the UK are taken into account, one in 200 homes now have a Help to Buy loan.

Use our mortgage calculator, created with the Mortgage Advice Bureau, to work out the best deal for you.