First-time buyers were most responsible for the huge growth within the UK mortgage market in 2013, according to figures from the Council of Mortgage Lenders (CML). The brighter economic outlook and the launch of government schemes like Help to Buy encouraged them to become property owners, borrowing the largest portion of new home loans since 2000.
According to the report, banks and building societies across the country provided 268,800 mortgages to first-time buyers last year, or 44% of the total loans advanced for house purchases in the period, which stood at 605,100. This was the highest percentage since 2000 and 23% higher than in 2012. In money terms, housing loans to first-time buyers expanded 31% to a combined £36.1 billion.
In December alone, mortgages taken out by first-time buyers increased 37% on December and by 1% compared with November 2013.
The average mortgage amount taken out by new borrowers was estimated at £114,975 in 2013, or 3.33 times their salary – against 3.26 the previous year. This was also the highest value and multiple since CML started tracking mortgage data in 1974, excluding the record £116,549 figure seen in 2007, which equalled 3.36 times average earnings.
But despite the steady rise in residential purchases, the number of home buyers is yet to reach the level seen before the financial crisis gripped the country, when lenders typically provided over one million loans a year and first-time buyers were responsible for 50% of new home loans, The Guardian commented.
Have you recently decided to jump on the property ladder? And have you been affected by the government’s Help to Buy scheme?