Increase in First Time Buyer Loans

Mon, 15 Feb 2010

The Council of Mortgage Lenders has revealed that the number of loans issued to first time buyers reached a two year high in December. 24,900 loans were approved to first time buyers in December, the highest figure since November 2007, while there was a 26 per cent increase in the value and volume of the loans, which were worth a total of £2.9 billion.

With buyers keen to avoid the January 1st return of stamp duty, there was a 51 per cent increase in the number of mortgages approved on properties costing less than £175,000. 10,300 loans were approved to first time buyers on such properties, accounting for 55 per cent of the loans secured by new buyers, while home movers also took out 11,200 loans on such properties .

The Council of Mortgage Lenders also published analysis revealing how low interest rates complicate affordability when capital repayments are considered. So while the low interest rate deals from banks are clearly helpful, their positive impact is hindered by the higher level of capital repayment .

Overall, December was a positive month, with overall mortgage lending up from 51,000 to 63,000, and nearly double the 33,000 of December 2008.
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