The number of loans advanced to first-time buyers in May was at its highest level since November 2007, according to figures released today by the Council of Mortgage Lenders.Transaction numbers increased 41.8 per cent from 17,700 in May 2012 to 25,100 in May 2013. The last time lenders advanced more loans to first-time buyers was in November 2007, when a total of 28,900 loans were advanced to borrowers looking to get on the housing ladder.
The total value of all first-time buyer lending was £3.4bn in May, up 54 per cent on the £2.2bn advanced in the same month last year.
The number of loans to first-time buyers in May was up 29.3 per cent from 19,400 in April, while the total value of lending was up 36 per cent from £2.5bn.
There are signs emerging that lenders are starting to lend at higher LTVs as the average first-time buyer LTV ratio rose from 81 per cent in April to 83 per cent in May, the highest level since November 2008.
CML director general Paul Smee says: “Although monthly lending is still running at far less than half its typical monthly level during the peak, there is no doubt that the mortgage market is firmly open for business. Both the borrowing appetite of first-time buyers, and the availability of attractive mortgages for them, have improved markedly since a year ago.”
SPF Private Clients chief executive Mark Harris says: “Government attempts to get the banks lending again are clearly working. The improvement in high loan-to-value lending in particular has resulted in a surge in number of first-time buyers.
“While all sectors of the lending market saw an improvement in lending volumes in May, it was first-time buyers who benefited the most.”
Lending to house purchase was also up year-on-year in May, although remortgage lending dipped compared to May last year.
The total number of house purchase loans was up 18.7 per cent from 47,100 in May last year to 55,900 a year later. The total value of house purchase lending was up 18.3 per cent from £7.1bn to £8.4bn.
In May there were 29,500 loans to remortgage customer, worth £4bn, compared with 29,800, worth £3.9bn, in the same month a year earlier.
Lending for house purchase accounted for 57 per cent of all lending in May, compared with 56 per cent a year earlier.
There were 30,700 loans advanced to home movers in May, up 4.4 per cent 29,400 in May last year. The total value increased from £4.8bn to £5.1bn in May this year.