Increased number of first-time-buyer mortgages


A major building society has reported that its first-time buyer mortgage approvals increased by almost a third in the first half of 2012.

Yorkshire Building Society said it has seen a 32% increase in the number of approvals to this sector of the market in the first six months of this year, compared with the first half of 2011.

Mortgage lenders generally have ramped up competition in recent weeks by cutting some of their rates, although this has tended to be aimed at those with larger amounts of equity at around 40%.

The Bank of England has said it expects borrowers with smaller deposits to have a particularly tough time trying to get a deal in the coming months, with many lenders having tightened their criteria amid wider economic uncertainty.

Lenders and estate agents reported a flurry of activity among first-time buyers in early 2012 before a stamp duty concession for this sector ended in March.

Charlotte Nelson, spokeswoman for consumer website Moneyfacts, said: "Although Yorkshire Building Society is currently not in Moneyfacts' 'best buys' for first-time buyers, they are highly competitive, in particular its two and five year fixed rates at 90% loan-to-value being in the top five lowest rates available in the sectors."

Yorkshire, which is the second largest building society in the UK, said it plans to continue offering deals to people with smaller deposits.

Yorkshire Building Society Group's direct mortgage manager Chris Smith said: "We remain true to our building society roots and that means we want to help people borrow the money they need to buy their own home, regardless of whether they have a big or small deposit."