Mortgage lending boosted as first-time buyers get foot on the ladder
A rise in lending was driven by first-time buyers.
Lending for home purchases was given a boost in May as more first-time buyers secured funds to buy a property, figures from a trade association show.
There were 32,200 new first-time buyer mortgages granted in May, up 8.1% year-on-year, according to figures from UK Finance.
The total value of new lending was £5.4 billion, a rise of 12.5% compared to the same month a year before.
UK Finance said the average age of a first-time buyer was 30, with a household income of £42,000.
Jackie Bennett, director of mortgages at UK Finance, said: “The mortgage market is seeing a pre-summer boost, driven by a rise in the number of first-time buyers and strong remortgaging activity.
“It is also particularly encouraging to see an increase in homemovers, after a period of relative sluggishness in this important segment of the market.”
However, she said the buy-to-let market remained “constrained” by regulatory tax changes.
There has been a weaker mortgage lending trend in the buy-to-let sector following the introduction of a stamp duty hike for second home owners.
There were 5,500 new buy-to-let mortgages completed in the month. By value, this represented £700 million, down 22.2% year-on-year.
Jonathan Samuels, CEO of the property lender, Octane Capital, said: “May’s lending data is a perfect snapshot of the sea change in the property market in recent years.
“First time buyers are in the ascendancy while amateur landlords are beating a fast retreat.”
Shaun Church, director at mortgage broker Private Finance, said that efforts to help “Generation Rent” were starting to have an effect.
Mr Church added: “Easing house price growth matched with government initiatives such as stamp duty relief and Help to Buy have given prospective homeowners a much needed helping hand on to the housing ladder.
“Competition within the mortgage market is also helping to boost first time buyer numbers, making mortgages both attainable and affordable.”