First-time mortgage lending 'down'

 

Mortgage lenders have insisted that first-time buyer activity is strengthening, despite new figures showing that lending to this sector dipped for the first time since the start of the year.

Some 19,400 loans worth £2.5 billion were taken out by first-time buyers in April, a 1% decrease on the previous month, according to Council of Mortgage Lenders (CML) figures.

This marked the first drop in first-time buyer numbers since January.

Despite the recent pause, activity among first-time buyers in the first four months of the year has been stronger than during the same period a year ago, with 11% more loans advanced, the CML said.

First-time buyers made up 46% of all loans to home buyers in April, "considerably" higher than the 38% average seen since 2007, the CML said.

Lending to first-time buyers was two-thirds higher in April than in the same month last year, although the ending of a stamp duty concession for this sector a year ago distorted the market.

The latest figures also show that first-time buyers now need to put down a 19% deposit on average, compared with 20% in March.

Mortgage availability has shown a sharp increase since last August and lenders have slashed their rates since the Government launched a scheme called Funding for Lending last August to help boost the market.

There have been signs that the scheme has prompted stronger competition among lenders to attract first-time buyers, with the launch of some innovative low-deposit deals.

But financial information website Moneyfacts has said that despite an increased number of mortgages on the market generally, fewer deals are available for people with a 5% deposit than there were a year ago.

Loans available for people with a 5% or a 10% deposit make up 14% of the mortgage market, a share which has not changed from a year ago, Moneyfacts said.

The Government's new scheme, called Help to Buy, is specifically aimed at helping people with smaller deposits and will be fully fired into action from next year.

CML director general Paul Smee said: "Lending to first-time buyers remains above the levels seen at the same time last year.

"The Help to Buy Scheme announced in this year's Budget should provide a further boost to the first-time buyer and home-mover markets but we still await further details on how the initiatives will work."

The CML's latest figures also show £3.8 billion-worth of mortgage loans were advanced to home movers in April, a 3% drop on the previous month but higher than a year ago.

A total of £3.4 billion was loaned to borrowers re-mortgaging, showing 10% growth compared with March but slightly down on a year ago.

Housing Minister Mark Prisk said: "We're determined that anyone looking to work hard, get ahead in life and own their own home should get the government help they need.

"That's why we've introduced the Help to Buy scheme to enable homeowners to buy homes with a fraction of the deposit they would normally require. And because the scheme is available on newly built homes, it will also help boost housebuilding, on top of our multimillion-pound package of measures to get Britain building."

PA

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebooksNow available in paperback
Life and Style
tech
News
The 67P/CG comet as seen from the Philae lander
scienceThe most important scientific breakthroughs of 2014
Arts and Entertainment
Ian McKellen as Gandalf in The Hobbit: The Battle Of The Five Armies
film
Arts and Entertainment
Sarah Koenig, creator of popular podcast Serial, which is to be broadcast by the BBC
tvReview: The secret to the programme's success is that it allows its audience to play detective
News
Ruby Wax has previously written about her mental health problems in her book Sane New World
people
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

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

iJobs Job Widget
iJobs General

Recruitment Genius: Sales Executives - OTE £60,000

£25000 - £60000 per annum: Recruitment Genius: Are you passionate about Custom...

Recruitment Genius: Care Workers Required - The London Borough of Bromley

£15000 per annum: Recruitment Genius: This homecare agency is based in Beckenh...

Recruitment Genius: Sales Executives - OTE £50,000

£25000 - £50000 per annum: Recruitment Genius: Are you passionate about Custom...

Recruitment Genius: Sales Executives - OTE £50,000

£25000 - £50000 per annum: Recruitment Genius: Are you passionate about Custom...

Day In a Page

Homeless Veterans appeal: 'You look for someone who's an inspiration and try to be like them'

Homeless Veterans appeal

In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
Could cannabis oil reverse the effects of cancer?

Could cannabis oil reverse effects of cancer?

As a film following six patients receiving the controversial treatment is released, Kate Hilpern uncovers a very slippery issue
The Interview movie review: You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here

The Interview movie review

You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here
Serial mania has propelled podcasts into the cultural mainstream

How podcasts became mainstream

People have consumed gripping armchair investigation Serial with a relish typically reserved for box-set binges
Jesus Christ has become an unlikely pin-up for hipster marketing companies

Jesus Christ has become an unlikely pin-up

Kevin Lee Light, aka "Jesus", is the newest client of creative agency Mother while rival agency Anomaly has launched Sexy Jesus, depicting the Messiah in a series of Athena-style poses
Rosetta space mission voted most important scientific breakthrough of 2014

A memorable year for science – if not for mice

The most important scientific breakthroughs of 2014
Christmas cocktails to make you merry: From eggnog to Brown Betty and Rum Bumpo

Christmas cocktails to make you merry

Mulled wine is an essential seasonal treat. But now drinkers are rediscovering other traditional festive tipples. Angela Clutton raises a glass to Christmas cocktails
5 best activity trackers

Fitness technology: 5 best activity trackers

Up the ante in your regimen and change the habits of a lifetime with this wearable tech
Paul Scholes column: It's a little-known fact, but I have played one of the seven dwarves

Paul Scholes column

It's a little-known fact, but I have played one of the seven dwarves
Fifa's travelling circus once again steals limelight from real stars

Fifa's travelling circus once again steals limelight from real stars

Club World Cup kicked into the long grass by the continued farce surrounding Blatter, Garcia, Russia and Qatar
Frank Warren column: 2014 – boxing is back and winning new fans

Frank Warren: Boxing is back and winning new fans

2014 proves it's now one of sport's biggest hitters again
Jeb Bush vs Hillary Clinton: The power dynamics of the two first families

Jeb Bush vs Hillary Clinton

Karen Tumulty explores the power dynamics of the two first families
Stockholm is rivalling Silicon Valley with a hotbed of technology start-ups

Stockholm is rivalling Silicon Valley

The Swedish capital is home to two of the most popular video games in the world, as well as thousands of technology start-ups worth hundreds of millions of pounds – and it's all happened since 2009
Did Japanese workers really get their symbols mixed up and display Santa on a crucifix?

Crucified Santa: Urban myth refuses to die

The story goes that Japanese store workers created a life-size effigy of a smiling "Father Kurisumasu" attached to a facsimile of Our Lord's final instrument of torture
Jennifer Saunders and Kate Moss join David Walliams on set for TV adaptation of The Boy in the Dress

The Boy in the Dress: On set with the stars

Walliams' story about a boy who goes to school in a dress will be shown this Christmas