Loans to first time buyers up 24%

Nearly 16,000 loans were made to
first-time buyers in January compared to last year

A total of 15,900 loans - worth £2 billion - were advanced to
first-time buyers in January 2013, compared to January 2012
(12,800 loans), according to new figures from the Council of Mortgage Lenders.

Altough it was the largest January total since January 2008 (17,700 loans), it represents an 18 per cent fall from December 2012..

For the third consecutive month, first-time buyer activity accounted for 42 per cent of all house purchase loans. There was also a minor movement towards cheaper properties among first-time buyers with a small increase in the proportion of properties bought for less than £125,000.

Overall, house purchase lending recorded its highest January total since 2008, increasing by 11 per cent compared to January last year.

Commenting on the data, CML director general Paul Smee said: "Seasonal factors clearly had an impact on lending figures in January, but it still remains the best start to a year since 2008. Mortgage finance is available and lenders are open for business, allowing more borrowers to take the step into homeownership or move house in line with their needs."

Richard Sexton, director of e.surv chartered surveyors, commented: “Life is becoming easier for first-time buyers. Although deposit requirements are still high, rates are lower and banks are more willing to lend to lower income borrowers."

Mark Harris, chief executive of mortgage broker SPF Private Clients, added: "January is never the busiest month of the year for the housing market as it tends to get off to a slow start after Christmas and the New Year but the numbers look particularly good when compared with previous Januarys, suggesting recovery is underway.

"Encouragingly, there are more first-time buyers around helping boost these numbers, which is crucial to the health of the housing market. They are still putting down a 20 per cent deposit, on average, and with the Funding for Lending Scheme making more deals available at 90 per cent loan-to-value, this should further increase the number of first-time buyers able to get on the housing ladder in coming months."

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