First-time buyers on the rise

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House keys

ON a non-seasonally adjusted basis, UK Finance data shows that mortgage lending in June rose.

First-time buyers borrowed £5.9bn, up 26 per cent on the previous month and 9 per cent on June 2016. This equated to 36,000 loans, up 22 per cent month-on-month and 6 per cent year-on-year.

Those that moved home borrowed £7.8bn, up 26 per cent on May and 15 per cent year-on-year. This equated to 36,500 loans, up 24 per cent month-on-month and 9 per cent compared to a year ago.

Paul Smee, Head of Mortgages at UK Finance, commented:  “June’s figures show a busy month in the mortgage market, with home movers having their highest monthly activity levels for over a year and an especially high number of loans for first time buyers. Buy-to-let activity remains subdued compared to its 2015 peak but consistent month-to-month since stamp duty changes in April 2016.

“But there are also signs of a softening market and we are not anticipating that this performance will be sustained in the second half of 2017. A slightly lop-sided market could well show some growth in house purchase lending but alongside reduced remortgage and buy-to-let activity.”

Affordability metrics for first-time buyers saw the typical loan size increase from £137,000 in May to £139,000 in June. The average household income increased to £41,000 from £40,500.

The average amount borrowed by home movers in the UK increased to £180,000 from £177,000 the previous month, while the average home mover household income increased month-on-month from £54,900 to £55,200.

Buy-to-let activity was driven by remortgage lending which accounted for over two thirds of total lending. Buy-to-let house purchase and remortgage activity in June remained consistent to monthly levels seen since the change on stamp duty on second properties introduced in April last year.

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