First-time buyer activity in the UK continued to grow in March with the number increasing by 20%, according to new figures published by the Council of Mortgage Lenders (CML).
There was also a marginal month-on-month rise in the volume of home movers and remortgage lending, helping to contribute to a welcome increase in overall property purchase lending.
The data reveals that overall a total of 19,100 loans worth £2.4bn were advanced to first-time buyers in March, up from 15,900 loans in February, but down on the 24,400 loans advanced in March 2012.
But the CML pointed out that March 2012 marked the end of the first-time buyer stamp duty holiday which fuelled a sharp rise in in activity.
Despite the spike in March last year, first time buyer lending activity over the first quarter of 2013 declined only slightly compared to activity in Q1 2012. Overall, 50,900 loans were advanced to first-time buyers in Q1 of this year, only slightly down on 51,200 loans in the first three months of last year.
The data also shows that while the loan to value ratio for first time buyers remained at 80%, there has been a gradual increase in the proportion of first time buyers taking out loans with a deposit of 10% or less.
CML director general Paul Smee said: “First time buyer activity in the first quarter was nearly at the same level as last year when figures were buoyed up by the end of the stamp duty holiday. This suggests that the market continues to be favourable for those looking to buy their first home.”
“More borrowers are taking out higher loan to value mortgages than any other time in the last four years, a sign that lenders are open for business, and that borrowers, even those without a large deposit, are increasingly able to get a foot on the property ladder.”