Boost for first-time buyers as approved mortgages hit nine-year high
As mortgage rates continue to fall, more and more first-time buyers are managing to climb onto the property ladder. The latest official data from mortgage lenders has revealed that the number of loans approved for first-time buyers hit a nine-year high in June; a sixth more than a year ago.
Affordability for first-time buyers also remains good, although experts have pointed out that these figures mainly cover the period before the Brexit vote.
June saw the biggest number of first-time buyer mortgages since 2007
With mortgage rates having tumbled to record lows - and are set to fall further in the wake of August's base rate cut - first-time buyers are finding it easier to be approved for a home loan.
The latest data from the Council of Mortgage Lenders (CML) has revealed that more mortgages were approved for first-time buyers in June than in any month since August 2007. There were 34,300 loans approved for buyers taking their first step onto the property ladder in June, up almost a quarter (24%) on May and 17% higher than 12 months ago.
The average loan size for first-time buyers rose from £131,400 in May to £135,400 in June, while the household income of borrowers rose from £40,000 in May to £40,377 in June.
This data from the lending body shows that affordability measures for first-time buyers have remained relatively stable in recent months. The income multiple of first-time buyers went up from 3.51 to 3.55.
First-time buyer mortgages outstrip home mover loans for the third month in a row
The CML data revealed that home movers took out a total of 33,900 mortgage loans in June, up 28% on May's figures and 0.3% more than a year earlier.
Moneyfacts reveal that June was the third month in a row that the number of loans approved for first-time buyers had outstripped those approved to home-movers – a trend that had not been seen previously for 20 years.
Paul Smee, director general of the CML, says: "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."