First time buyer mortgage numbers continue to drop

The average loan is now £125,999

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For the second consecutive month, the number of first time buyers fell in September, according to new figures from the Council of Mortgage Lenders show

There were 26,800 first-time buyer loans in September, three per cent fewer than in August, though 16 per cent higher than September 2013. 

Lending to home movers also fell month-on-month for the second month in a row - in September, the number of loans to movers was 31,700, a 10 per cent drop on the previous month. However remortgage numbers were up 20 per cent compared to August.

Lending profiles stayed virtually the same between August and September with the typical first-time buyer borrowing 3.40 times their gross income, the average loan size hovering at £125,999 and the typical gross income of a first-time buyer household rising very slightly to £38,690.

"We are approaching the end of twelve months of change, transition and growth," said Paul Smee, director general of the CML. "The lending market is healthier than it was a year ago, and set to remain so."

Jonathan Harris, director of mortgage broker Anderson Harris, said: "This reflects the market generally with the number of home movers also falling, suggesting a growing lack of confidence among buyers.

"Encouragingly, the number of people remortgaging rose as borrowers finally begin to realise what excellent rates are available to them. There are also growing fears of an interest rate rise, which is a strong motivator in getting people off their lender's standard variable rate."

Richard Sexton, director of e.surv chartered surveyors, said the figures indicated that the mortgage market was starting to stabilise.

"Regulation has been tightened up, and the market has matured into a healthy, sustainable lending environment," he added. "However, scratching beneath the surface reveals demand at the bottom of the market is starting to fall away. The combination of a dwindling stock of homes, drooping economic confidence and further regulation in the form of loan-to-income caps is putting off many buyers from moving."