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Mortgage boost for first time buyers

Mortgage boost for first time buyers

Category: Mortgages

Updated: 14/06/2011
First Published: 14/06/2011

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

First time buyers have been enjoying an increasingly friendly welcome from lenders, the latest mortgage market data has revealed.

According to the Council of Mortgage Lenders (CML), first time buyers borrowed on average 80% of their property's purchase price in April, as lenders continued to loosen their lending criteria.

In addition, the number of loans approved for first time buyers increased by 8% in April compared with the previous month, and was also up slightly compared with a year earlier.

The news will come as a welcome boost to those who have been struggling to find their way onto the property ladder.

High deposit requirements and difficulties in securing a suitable mortgage have left many first time buyers frustrated in recent years.

However, the average 80% loan-to-value level reported in April is higher than has been seen during most of the last two and a half years.

Although it remains well below the 90% that first time buyers typically borrowed before 2008, it is at least moving in the right direction.

Only last week, revealed the number of first time buyer mortgages on the market is on the rise, while the average cost of the deals has been falling.

Of the 183 products aimed at first time buyers, 31 are available to those with just a 5% deposit.

At the same time, the average first time buyer rate has slipped to 5.22%, down from 5.37% a year ago, and 5.63% in June 2009.

Elsewhere amongst the CML data it was revealed that the overall number of mortgages approved for people buying a house increased in April.

However, remortgage levels fell, as expectations of an imminent rise in interest rates receded.

"The market continues on a stable footing and the increase in house purchase lending is a good sign that the stability will continue throughout 2011," said Michael Coogan, CML director general.

"However, the economic outlook, coupled with Bank of England subdued approvals data for April, suggests a muted summer for mortgage completions so we do not expect further increases in lending over the coming months."

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