Lending to first-time buyers plummets - Mortgages - News - Moneyfacts


Lending to first-time buyers plummets

Lending to first-time buyers plummets

Category: Mortgages

Updated: 14/06/2012
First Published: 14/06/2012

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.
Following a surge of activity in March, April saw a significant fall in mortgage lending, in particular with first-time buyers.

A fall was expected after the end of the stamp duty holiday on March 24.

The largest fall was to first-time buyers, with lending at around half the levels of the previous month.

The drop off in activity for first-time buyers was seen mainly among properties that would have qualified for the exemption in March so were subject to stamp duty in April.

Purchases of properties valued between £125,000 and £250,000 fell by 70% in April compared to March.

By contrast, those valued at £125,000 or below, so still exempt from stamp duty, fell by a more modest 11%, while first-time buyer purchases for properties over £250,000, so not eligible for the exemption in any case, fell by only 5%.

In total, 12,600 loans were advanced to first-time buyers, down by 48% compared to March and 12% compared to April 2011.

By value, first-time buyers borrowed £1.5 billion, down 52% compared to March and 12% compared to April last year.

Lending to home movers also fell. 23,400 loans worth £3.8 billion were taken out in April, down by 15% (14% by value) compared to March but an increase of 3% (by volume and value) compared to April 2011.

"April's figures show the expected effect of the end of the stamp duty concession on UK mortgage lending," said Paul Smee, director general of the CML.

"Given the economic uncertainty, any significant pick up in lending in the coming months seems unlikely.

"However, our recent research highlights that over 80% of people still aspire eventually to own their own homes, and long term demand clearly still exists."

Find the best low deposit mortgage for your first home.

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

Related Articles

Does your mortgage lender owe you money?

Earlier this week, the financial watchdog revealed that hundreds of thousands of mortgage holders could have been overcharged by their lender. Are you one of the many who could be in line for a windfall?

Do you think your home will rise in value?

There’s been a lot of talk recently about the rate of house price growth slowing, but is it affecting your personal expectations? According to research, it could be, with fewer people now expecting the value of their property to increase.

Confidence among “second steppers” is on the rise

We all know how difficult it can be taking that first step on the ladder, but what about the second step? In many cases, getting onto the next rung can be just as challenging, but happily, confidence among this cohort appears to be on the rise.