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First Time Buyers
Council of Mortgage Lenders
Gross mortgage lending is on the rise, thanks to an increase in remortgage activity. Data from the Council of Mortgage Lenders (CML) revealed that lending grew by five per cent in April, although house price lending fell slightly compared to March. In the fourth month of the year a total of GBP 3.4 billion was advanced to borrowers remortgaging, up by ten per cent compared to March. While this is down three per cent year-on-year, the rate of decline has increased over the last two months.In April, first-time buyers took out 19,400 loans (worth GBP 2.5 billion), down one per cent compared to March. Although year-on-year comparisons are distorted due to the impact of the end of the stamp duty concession in March and April last year, the first four months of 2013 have been positive. Between January and the end of April, 70,700 were advanced - 11 per cent stronger than the same time last year when just 63,500 loans were given.Although the number of first-time buyers taking out loans decreased, their proportional share of total house purchase loans increased. In April, 46 per cent of all house purchase lending was to those looking to get onto the property ladder. This is considerably higher than the 38 per cent average seen in 2007. First-time buyers also borrowed a slightly larger amount in April than in March, typically seeking loans 3.25 times larger than their income. This is marginally up from 3.24 times in March. However, first-time buyer mortgage payments took a slightly lower proportion of their income - 19.1 per cent in April compared to 19.3 per cent in March.Commenting on the data, CML director general Paul Smee said: "Lending to first-time buyers remains above the levels seen at the same time last year, despite the boost caused by the end of the stamp duty holiday in March 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."
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