Lending to first-time buyers up 34%

Total lending in last three months at its highest level since 2007

First-time buyers took out 23,600 loans in September, according to latest figures from the Council of Mortgage Lenders, a 34 per cent increase compared to September 2012. Between July and September, first-time buyer lending up 16 per cent on the previous three months.

Total home-owner house buying lending fell 14 per cent in September on August, but was up year-on-year by 20 per cent. Total buy-to-let loans increased slightly to 14,600 loans in September, up 0.7 per cent compared to August.

The typical first-time buyer borrowed 3.39 times their gross income.

Paul Smee, director general of the CML, said: "First-time buyers were a key driver in the first half of 2013 but now home movers and remortgages are showing renewed strength which puts the market in a good position to continue momentum into the final few months of 2013 and the new year."

Mark Harris, chief executive of mortgage broker SPF Private Clients, said: "First-time buyers are finding it easier to get a mortgage. Early data regarding the Help to Buy scheme suggest that first-time buyers are also primarily benefiting with more than 80 per cent of the Halifax's applicants so far being first-time buyers, for example. We expect the scheme to significantly boost the number of first-time buyers in coming months.

Richard Sexton, director of e.surv chartered surveyors, said: "The mortgage market is brimming with vim and vigour. Help to Buy has pepped up lending levels, and for many buyers it has transformed the idea of buying a home from distant dream to tangible reality. The number of first time buyers is springing back towards what it was before the financial crisis, and despite a slight seasonal dip, house purchase lending is up by a fifth compared to last year.

"But it’s not just first-time buyers who are benefiting from Help to Buy, a good slice of the scheme is also helping borrowers that are already on the ladder, who are using it to upsize. Despite the growing momentum, it is quite possible that moving into next year, lending levels could begin to tail off, as the initial publicity surrounding the scheme subsides. One of the most pressing issues on the lending agenda that hasn’t been addressed by the scheme is the lack of housing supply. Without new homes, the growing demand will continue to drive up house prices and prevent further buyers from getting a foothold in the market."