First Time Buyer Loan Numbers Increase
There was a lot of doom and gloom throughout last year regarding the economy of the UK, particularly in the housing and home owner loan market. But one area which saw a significant level of growth was that of the first time buyer loan market.
The latest figures from e surv, have shown that the number of first time buyers entering the housing market and applying for their first homeowner loan or mortgage, saw a marked increase over the course of last year, with the main reason for this being the increase in the number of home owner loan products which offer higher loan to value ratios.
The number of new home owner loans with a loan to value of 85 per cent or higher increased by around 32 per cent over the course of 2011, compared with the previous twelve month period, with the majority of these loans being chosen by first time buyers who have been struggling to raise sufficient deposit in the past.
There were a total of 57,301new loans with a loan to value in excess of 85 per cent during last year, almost 10,000 more than the previous year and the average loan to value for a first time buyer in the UK increased to 69 per cent in 2011, up from 66 per cent as at December 2010.
With higher loan to values on offer to first time buyers, coupled with low house prices and cheap loan rates due to the low base rate of interest, the housing and home owner loan market is now at its most accessible and affordable level since August 2007.
Richard Sexton of e surv said “Banks have made a concerted effort to increase the amount they lend to first time buyers, which is reflected in the big jump in higher loan to value lending. They are also supplementing this with more lending to buy to let investors.”
