First-time buyers taking advantage of property market
In Ian Preston’s May market update, he spoke of a busy property market in Yorkshire and how there are super low interest rates currently with attractive mortgage offers.
Perhaps then, it’s unsurprising that so many first-time buyers are currently flooding the market across the country. With this in mind, March saw 30% more loans for first-timers than February and up a whopping 12% from the same month last year – in fact, it was the highest number since March 2007.
This accounts for borrowing of almost £5bn during the third month of the year just for those buying a new home and 31,500 separate mortgages – even more than others who traded up in property.
Why is this happening?
It’s possible that a slight drop in activity of buy-to-let landlords has opened the market a little wider to first-time buyers but, as mentioned above, the low interest rates and competitive mortgage offers have allowed more people to buy the home they want.
What does this mean for the property market?
As we’ve mentioned previously, the slow in house price growth hasn’t stopped the market in our region – March was our biggest month ever – and it is possible that this is actually attracting buyers into the market.
The stats have shown that the typical first timer is borrowing £133,500 (on average 3.53 times their income) in order to purchase a home. The loans account for 82.2% of the market value.
The director general of the Council of Mortgage Lenders, Paul Smee, who released these figures thinks this is positive for everyone and expects the momentum to continue thanks to the attractive deals on offer from lenders.
*Figures from Council of Mortgage Lenders (CML)
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