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First time buyer numbers on the up

First time buyer numbers on the up

Category: Mortgages

Updated: 16/04/2012
First Published: 16/04/2012

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.
First time buyer numbers increased during February, with a rush to beat the end of the stamp duty holiday likely to have contributed to the rise.

Figures from the Council of Mortgage Lenders (CML) show that 14,100 loans worth £1.7 billion were taken out by first-time buyers, up 8% by number and 6% by value from January and up 18% by number and 21% by value on last February.

It is yet more evidence that first time buyers have increasingly looked to take advantage of the stamp duty initiative, which came to an end on March 24.

Until then, first time buyers were not charged the usual 1% tax on properties worth between £125,000 and £250,000.

51% of first-time buyers bought properties priced between £125,000 and £250,000 in February, up from 49% in January.

While February was the last full month of the stamp duty concession, next month's data is expected to bring a further rise in first-time buyer numbers as they moved to beat the 24 March deadline.

The number of other home movers also increased in the month, albeit not to the extent of first time buyers.

Home movers took out 22,500 loans worth £3.7 billion, a 2% increase in number and a 3% increase in value from January and a 16% increase in number and 19% increase in value from February 2011.

It means that overall – including both first time buyers and other home movers – house purchase lending rose in February.

36,600 loans (worth £5.4 billion) were taken out, up 4% by number and 2% by value from January and up 17% by number and 20% by value from February last year.

Remortgaging continued to decrease in February. £3.3 billion was advanced, a 6% fall compared both to January 2012 and February 2011.

"It is encouraging to see the continuing year-on-year improvement in house purchase lending," said Paul Smee, director general of the CML.

"However it is not yet clear whether the end of the stamp duty concession will lead to a falling off in first-time buyer numbers and how much this may be offset by the government's NewBuy scheme, available to all buying a new build property."

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