First time buyers up 41% on last year

Survey results published by the Council of Mortgage Lenders today show that this growth in July continued to be buoyed by home-owner house purchase lending, in particular by growth in first-time buyers.

The CML data (which, as of this month, includes buy-to-let) shows:

• Total home-owner house purchase lending continued to grow, up 9% on June and 21% on July last year.
• First-time buyers took out 25,300 loans in July, an increase of 5% on June and of 41% compared to July 2012.
• Home movers took out 32,000 loans, an increase of 12% compared to June and up 9% on July last year.
• Home-owner remortgage lending continued to pick up compared to July 2012 and recent months, although the £3.8bn advanced remains subdued compared to historical volumes.  
• Total buy-to-let loans advanced increased to 15,200 in July, up 12% compared to June.
• Within this, 7,600 buy-to-let loans in July were for house purchase, up by 7% compared to June.
• In contrast to the picture in the home-owner market, buy-to-let remortgage lending grew more strongly than house purchase, increasing by 24% compared to June to £1.1bn. 

Lending for home-owner house purchase

Total home-owner house purchase loans (both movers and first-time buyers) continued to show the resilience and growth seen throughout 2013. 57,400 house purchase loans were advanced in July, an increase of 9% on June and up by 21% on July last year. These loans had a total value of £9.1bn, which was an increase of 12% on June and 23% compared to July last year. 

Table 1: Loans for house purchase and remortgage

	Number of house purchase loans	Value of house  purchase loans, £m	Number of  remortgage loans	Value of remortgage loans, £m
July 2013	57,400	9,100	27,000	3,800
Change from June 2013	8.9%	12.3%	5.5%	8.6%
Change from July 2012	21.1%	23.0%	7.6%	15.2%

Lending to first-time buyers

The strong growth in lending to first-time buyers since the beginning of the year has continued, with the number of loans advanced increasing by 5% compared to June. In July, 25,300 loans were advanced to first-time buyers, worth £3.5bn. By value, first-time buyer lending was 6% up on June and 46% up on July last year. 

The typical first-time buyer loan size stayed almost unchanged from June at £117,038, while average first-time buyer household income increased to £36,142 from £35,873 in June.

Affordability improved marginally in July compared to June reflecting the average loan size remaining largely unchanged but a higher income average, alongside a further fall in typical interest rates. Typically, first-time buyers in July borrowed 3.31 times their income in comparison to 3.33 in June and mortgage payments (capital and interest) accounted for 19.2% of income, down from 19.3% in June.