Belfast Telegraph

First-time buyer loans now close to parity with home movers

By Vicky Shaw

Strong activity among UK first-time buyers is matching the levels of mortgage borrowing by existing homeowners moving house in a trend not seen for 20 years, according to banks and building societies.

Some 48,600 loans were handed out for homeowner house purchase in February, around half (24,200) of which went to first-time buyers, with the remaining 24,400 going to home-movers, the Council of Mortgage Lenders (CML) said.

The number of first-time buyer loans was up by 11% year-on-year, while house purchase lending to home movers was down by 5.8% year-on-year.

On average, first-time buyers need to put down a 16.2% deposit, the CML's figures show.

Paul Smee, director general of the CML, said: "Borrowers took out more loans to purchase a home in the first two months of 2017 than any year since 2007.

"This is down to strong first-time buyer activity which has consistently matched home-mover borrowing over the past six months, a trend not seen in the UK for 20 years."

There have been suggestions that first-time buyers have been given a window of opportunity by the fall in buy-to-let investors buying properties.

The CML's figures show buy-to-let lending for house purchase plummeted by 44.7% annually in February, with 5,700 loans advanced.

A stamp duty hike for buy-to-let investors was imposed on April 1 last year, and there were signs of investors rushing to buy properties early last year before the deadline.

Mr Smee said: "House purchase activity on the buy-to-let lending side remains weak."

He said this trend is expected to continue due to tax changes for buy-to-let investors and lenders tightening their affordability criteria.

Latest figures how that Northern Ireland's average house price increased by 5.7% in the last year to £125,000.

But the Office for National Statistics (ONS) UK house price index revealed a decline in the number of house sales here - down nearly 18% during the last three months of 2016. There were 5,081 house sales at the end of last year.

Belfast Telegraph