First Time Buyer Loans Hit Ten Month High
Since the credit crunch hit the housing and home owner loan markets in the UK, first time buyers have been one of the worst hit sectors of the loan market, as many have simply been priced out of the market altogether, due to not being able to afford a loan.
Low loan to value ratios from banks and building societies, coupled with much tighter lending criteria, has meant that many would be first time buyers have had to postpone their plans to take out a loan and get onto the housing ladder, whilst others have abandoned their dreams of home ownership altogether.
But the latest figures from the Council of Mortgage Lenders (CML) have shown that the number of first timer buyers being accepted for a new home owner loan reached a ten month high during the month of June this year.
The number of new first time buyer loans being approved in June was the highest level since August last year and has increased by 24 per cent from May this year, although the number of loans is still 8 per cent lower than it was at the same time last year.
The figures also show that the average loan to value for a typical first time buyer was 80 per cent in June. This has increased from 75 per cent twelve months ago, largely due to more relaxed loan to value criteria from lenders.
Paul Hunt of Phoebus software said “With loan rates set to remain low for the foreseeable future, we can expect to see mortgage rates to sink even lower. Mortgage repayments fell in June as a proportion of borrowers’ income and as this is set to continue lenders will be emboldened to lend more money to first time buyers at higher loan to values.”
“This could be just the boost the property market has been crying out for in the last year.”
