MORTGAGE lending to first time buyers in the second quarter of this year reached its highest quarterly total since 2007 thanks to an increase in lending and improved mortgage rates according to Chesterton Humberts' latest CHROME research report and figures published by the Council of Mortgage Lenders (CML).
Due to the historically low 0.5% base rate and the government's Funding for Lending scheme, lenders have been reducing interest rates for mortgage products, a move that has allowed more first time buyers to get on to the property ladder.
In a further bid to boost the property market and help first time buyers specifically, the government launched its Help to buy scheme in April of this year with the aim of offering first time buyers with small deposits an equity loan to allow them to purchase new-build properties up to the value of £600,000. The scheme has already successfully attracted over 10,000 new build reservations in the three months since its launch.
According to the CML, first time buyers accounted for 46% of all house purchase loans in June, up 9% on the averages seen in 2007. These statistics clearly show the government initiatives to be effectively fueling activity at the lower end of market and therefore contributing to greater signs of recovery.
Duncan Ley of Chesterton Humberts says, "In the face of rising national average house prices it is encouraging to see that those who would usually struggle to accumulate enough deposit monies to secure a purchase now have a viable route on to the property ladder.
"A healthy property market increases consumer confidence, but it is especially important for the wider market that prospective first time buyers are able to make purchases as this has a significant effect on the supply and demand of property further up the ladder".
Although the news of an active first time buyer market is welcomed by anyone with an active interest in property, there remains concerns over the extent of regional differences, which, if they continue, will limit the ability of the UK property market to really flourish.
Other key observation in Chesterton Humberts' CHROME includes
The number and valu of new buy to let mortgages in Q2 were the highest since Q3 2008
Average UK rents reached their highest ever level in June
2013 has seen the highest half-yearly new home registrations since 2008
Average national house prices continue their upward trend, albeit the growth rate is modest
House prices close to Premier League football grounds have increased by 135%
Wales (+1.6%) overtook the South East (1.0%) as the region with the fastest annual house price growth rate in June (excluding London)
Average London house prices accelerated in June to 6.9% on an annual measure.