Large Increase In First Time Buyer Loans
For a couple of years now, there has been a distinct lack of first time buyers entering the housing and home owner loan markets. The main reasons for this have been, uncertainty over the future of the housing market and economy, lack of loan availability from banks and building societies and large deposit requirements to meet lenders’ loan to value criteria.
But according to the latest figures from the home owner loan and mortgage broker John Charcoal, the number of first time buyers increased by around 80 per cent in July this year, which is the highest level of activity in this area since February.
More than 60 per cent of all new loans were for house purchase in July and although this does not necessarily mean that the housing and home owner loan markets are starting to recover fully, John Charcoal say that it is optimistic and shows signs of growing consumer confidence.
Apart from a rush of first time buyers trying to beat the stamp duty holiday deadline before the end of last year, the first time buyer loan market has been quiet this year, as many struggle to obtain the loan they require and others are reluctant to commit to a new home owner loan until the economy settles down and the consequences of a new government become fully apparent.
Drew Wotherspoon of John Charcoal said “This is the highest level since February this year and perhaps suggests that first time buyers are willing to dip their toe into the market again after sensibly putting any plans on hold pending the outcome of the election and subsequent emergency budget.”
“However, one month does not make a trend, so John Charcoal is wary of drawing too many conclusions from this figure. That said, it will be interesting to see over the coming months if the trend does continue.”
