First-time home buyers flood market

FIRST-TIME buyers are flooding back into the housing market at the fastest rate for two years, the country's biggest building society said yesterday.

The Nationwide said the number of people joining the property ladder rose 5 per cent in the first three months of the year - the highest increase since summer 1997.

Last year about 35 per cent fewer first-time buyers entered the market compared with the peak reached in the 1980s.

In a separate report, the UK's leading banks reported mortgage lending in April was 20 per cent up on a year ago, for the second month in a row.

In its May housing index, Nationwide said annual inflation was running at 7.4 per cent, compared with 7.1 per cent in April. Prices rose 1.2 per cent between April and May, taking the average price of a home to pounds 69,933. The previous monthly rise was just 0.1 per cent.

Philip Williamson, Nationwide marketing and commercial director, said: "Central to the improved outlook for the housing market is renewed interest from first-time buyers.

"This is likely to have been driven by higher real-income growth, low mortgage rates and continued jobs growth. With the wider economy looking set for a soft landing and consumer confidence surging, housing market activity should improve further this year."

The figures back up official data from the Land Registry for the first quarter, which showed prices of new flats and maisonettes - the typical first buyer's home - rose 22 per cent.

Annual house price inflation of 7.4 per cent is ahead of both the Nationwide's own forecast of 4.5 per cent and the Halifax's figure of 3.7 per cent, which may reflect the north-south split between the two lenders.

Mr Williamson warned that southern England had seen stronger gains than anywhere else, as other regions had not been able to offset manufacturing job losses with new jobs in other sectors. "This pattern is likely to persist for much of the year, though London price rises may temper as buyers look to surrounding areas in search of value," he said.

The British Bankers' Association said mortgage lending by the big banks surged 20 per cent last month compared with a year ago.

Gross mortgage lending by the main British banks totalled pounds 5.18bn compared with March's total of pounds 4.97bn. The number of new home loans, at 63,151, also rose at an annual rate of 20 per cent, it said.

The association said comparisons were confused by building societies converting into banks over the past year, but said the underlying trend showed 20 per cent growth.

"The major banks' mortgage business maintained a higher level of activity, in excess of the usual seasonal upturn at this time of year," said Tim Sweeny, the association's director general.

It also reported that new lending on credit cards rose by pounds 487m in April.

Start your day with The Independent, sign up for daily news emails
i100 In this video, the late actor Leonard Nimoy explains how he decided to use the gesture for his character
Arts and Entertainment
Secrets of JK Rowling's Harry Potter workings have been revealed in a new bibliography
arts + ents
Down-to-earth: Winstone isn't one for considering his 'legacy'
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: HR Benefits Manager

£40000 - £50000 per annum + pro rata: SThree: SThree Group have been well esta...

Recruitment Genius: Office Manager / Financial Services

£30000 - £37000 per annum: Recruitment Genius: Established in 1999, a highly r...

Jemma Gent: Year End Accountant

£250-£300 Day Rate: Jemma Gent: Are you a qualified accountant with strong exp...

Jemma Gent: Management Accountant

£230 - £260 Day Rate: Jemma Gent: Do you want to stamp your footprint in histo...

Day In a Page

HIV pill: Scientists hail discovery of 'game-changer' that cuts the risk of infection among gay men by 86%

Scientists hail daily pill that protects against HIV infection

Breakthrough in battle against global scourge – but will the NHS pay for it?
How we must adjust our lifestyles to nature: Welcome to the 'Anthropocene', the human epoch

Time to play God

Welcome to the 'Anthropocene', the human epoch where we may need to redefine nature itself
MacGyver returns, but with a difference: Handyman hero of classic 1980s TV series to be recast as a woman

MacGyver returns, but with a difference

Handyman hero of classic 1980s TV series to be recast as a woman
Tunnel renaissance: Why cities are hiding roads down in the ground

Tunnel renaissance

Why cities are hiding roads underground
'Backstreet Boys - Show 'Em What You're Made Of': An affectionate look at five middle-aged men

Boys to men

The Backstreet Boys might be middle-aged, married and have dodgy knees, but a heartfelt documentary reveals they’re not going gently into pop’s good night
Crufts 2015: Should foreign dogs be allowed to compete?

Crufts 2015

Should foreign dogs be allowed to compete?
10 best projectors

How to make your home cinema more cinematic: 10 best projectors

Want to recreate the big-screen experience in your sitting room? IndyBest sizes up gadgets to form your film-watching
Manchester City 1 Barcelona 2 player ratings: Luis Suarez? Lionel Messi? Joe Hart? Who was the star man?

Manchester City vs Barcelona player ratings

Luis Suarez? Lionel Messi? Joe Hart? Who was the star man at the Etihad?
Arsenal vs Monaco: Monaco - the making of Gunners' manager Arsene Wenger

Monaco: the making of Wenger

Jack Pitt-Brooke speaks to former players and learns the Frenchman’s man-management has always been one of his best skills
Cricket World Cup 2015: Chris Gayle - the West Indies' enigma lives up to his reputation

Chris Gayle: The West Indies' enigma

Some said the game's eternal rebel was washed up. As ever, he proved he writes the scripts by producing a blistering World Cup innings
In Ukraine a dark world of hybrid warfare and murky loyalties prevails

In Ukraine a dark world of hybrid warfare

This war in the shadows has been going on since the fall of Mr Yanukovych
'Birdman' and 'Bullets Over Broadway': Homage or plagiarism?

Homage or plagiarism?

'Birdman' shares much DNA with Woody Allen's 'Bullets Over Broadway'
Broadchurch ends as damp squib not even David Tennant can revive

A damp squib not even David Tennant can revive

Broadchurch, Series 2 finale, review
A Koi carp breeding pond, wall-mounted iPads and a bathroom with a 'wellness' shower: inside the mansion of Germany's 'Bishop of Bling'

Inside the mansion of Germany's 'Bishop of Bling'

A Koi carp breeding pond, wall-mounted iPads and a bathroom with a 'wellness' shower