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First-time buyer activity improves

First-time buyer activity improves

Category: Mortgages

Updated: 06/06/2013
First Published: 06/06/2013

MONEYFACTS ARCHIVE
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The number of transactions carried out by first-time buyers increased by an impressive 15% between March and April this year, as mortgage product choice improved and rates dropped.

A total of 22,000 mortgages were advanced to people purchasing their first home in April this year compared with 19,100 during the previous month and just 12,300 in April 2012.

The introduction of a number of Government initiatives over the past twelve months has been cited as the reason for such as significant increase in first-time buyer activity.

Mortgage rates have been slashed to all-time lows since the Funding for Lending Scheme was launched in August last year, whilst a typical loan-to-value now stands at 80.4%, up from 79.9% in April 2012, suggesting a higher volume of low deposit mortgages are entering the market.

Despite an increase in activity, rises in house prices have seen the average deposit required by first-time buyers increase by 3% during April this year, suppressing some buyers' affordability prospects.

A deposit of around £27,178 is currently needed to secure a first property compared with £24,842 last year.

David Newnes, director of LSL Property Services, which published the research, said: "Transactions among first-time buyers increased significantly in April as an improvement in the availability of high LTV mortgages allowed more first-time buyers to realise their dreams of homeownership.

"Increased lender confidence has lead to lower rates and a wider range of first-time buyer mortgages. The result: a super-strength opening to 2013 that has seen 15% more first-buyers than last year."

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