FIRST-TIME buyer numbers are up by almost a quarter year-on-year, lenders said yesterday, amid signs that government efforts to encourage mortgage lending are finally percolating down to people with smaller deposits.
A total of 21,700 loans worth £2.7 Billion (GBP) were made available to first-time buyers in November 2012, one of the highest monthly totals in the last three years, the Council of Mortgage Lenders (CML) said.
These figures mean that first-time buyer numbers were up by 24% compared with a year earlier, and increased by 8% month on month.
The uplift, along with increased activity among home movers, contributed to a 6% rise in the number of loans for residential property purchases in November, and year-on-year increases in activity are likely to continue, the CML said.
Figures from the Bank of England corroborate the statement from the CML, with figures showing the easing of strict mortgage conditions for first-time buyers, following the economic squeeze that kept many out of the UK property market since the start of the financial crisis in 2008.
The evidence is growing that the Bank of England’s Funding for Lending Scheme (FLS) is beginning to make a difference in the UK residential mortgage market.
However, in order for the FLS scheme to be deemed a success, the FLS has to make mortgages cheaper and more available for first-time buyers as well as safer for borrowers with larger deposits. The FLS works by using taxpayer guarantees to lower banks’ costs, which are then meant to be passed on to households and businesses.
Ascot Mortgages Ltd have noticed a significant increase in applications from first time buyers since the start of the new year, and that they believe this is because many had been saving up over the last few years in order to be able to make the deposit payment required. They have also noticed FTB applications are 35% more successful than the same time last year according to their internal records.
Kevin Gibson, Director at Ascot believes that “First time buyers are now starting to enter the property market as serious contenders as UK property prices remain subdued, and first time buyers are slowly starting to filter through who have previously found the large deposits required unobtainable. Ascot Mortgages analyse the majority of mortgage products that enter the UK mortgage marketplace and we specialise in providing our clients with the best available deals on the market. January has seen the introduction of several first time buyer mortgages”
There are some great mortgage products currently available on the market for first time buyers, the Family Springboard Mortgage from Barclays, It provides first-time buyers with a competitive 3-year fixed rate available with a 5% deposit at 4.69%, while the applicant’s family opens a savings account linked to the mortgage into the 3-year fixed rate period ends*, the savings are returned to the family when the initial 3-year fixed term ends.
Also available is the Newcastle Building Society, unlike many other 95% LTV products the Newcastle product is akin to other standard mortgages in so much as the client simply requires a 5% deposit – but without the need for a family member to act as guarantor.
Kevin Gibson said ”The return of these first time buyer mortgages at reasonable interest rates is a clear indicator that the market is now opening up its lending to first time buyers – a good sign that the Bank of England’s lending scheme is actually starting to work, and I am hopeful that this year is going to get a lot more first time buyers on the property ladder”
For more information on the whole range of First Time Buyer Mortgages
please contact Kevin Gibson at AscotMortgages
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