First time buyer mortgage figures rose 24 per cent in March compared to same period last year, according to figures from the Council of Mortgage Lenders.
The total number of new loans to homeowners for buying a house increased four per cent in March compared to February and was 17 per cent up on March 2013.
"All types of lending show positive year-on-year growth," said Paul Smee, director general of the CML, "but the rate of increase is not as frenetic as at the end of 2013.
"The new regulation of mortgages has now been introduced, but it will still be some time until we can assess its effect on the market. The industry was ready for the transition, and already actively implementing many of the changes prior to April. We do not anticipate prolonged disruption to the market as a consequence. But we still see affordability constraints as an important factor in determining the level of demand for mortgages which we see over the next year."
Andy Frankish, New Homes Director at the Mortgage Advice Bureau said first-time buyer numbers have been spurred on by easier access to high loan-to-value lending and smaller deposit requirements.
"With the trend for increasing consumer demand likely to continue, it is now up to the construction market to respond by ramping up production of new homes. Government plans for a Right to Build scheme should encourage more consumers to self-build, an area of the market which is relatively underused but ripe for opportunity. With enough support from local councils and the government, the common misconception that self-build is restricted to a privileged few should be corrected and those with aspirations to build their perfect home will find the help they need."
Mark Harris, chief executive of mortgage broker SPF Private Clients, added: "It is too early to say what impact the MMR will have but it will ensure that affordability is not compromised as house prices continue to rise. Even if borrowers do lack prudence and want to overburden themselves with a mortgage that they will struggle to pay when interest rates rise, the new rules mean they simply can't."
Andy Knee, Chief Executive of Legal Marketing Services said the figures showed that even before its introduction, MMR has already made changes to the market. "Despite year-on-year growth, both home-owner house purchase and remortgaging loans have seen falls compared to the last three months of 2013," he said. "Remortgaging was the first to feel the impact of MMR as lenders slowed lending in anticipation of the sweeping reforms, while a hiking of mortgage rates also discouraged many borrowers to swap deals."
George Spencer, chief executive officer of lettings agency Rentify, said: "These figures highlight the continuing strength of the buy-to-let sector. With the number of buy-to-let mortgages advanced up 46 per cent on the same quarter last year, it is an indication of the confidence investors have in the rental property market. The growing demand for rental properties and the availability of buy-to-let mortgages with easier eligibility criteria and low rates has again proven key to the success of this vital part of the UK economy.
"It remains to be seen if the political manoeuvring by the main parties will have any effect on this confidence, though neither the Coalition nor Labour have shown a clear understanding of the issues affecting the rental market. The government’s announcement that tenant fees charged by letting agents must be published more clearly proved to be a half-hearted attempt to gain column inches that will do nothing to address the culture of over-charging tenants by traditional letting agents."