Market revives as first-time buyers return
According to the council of Mortgage Lenders (CML), there were nearly 220,000 first-time buyers in 2012, compared to just over 190,000 the previous year. Property transactions also reached their highest levels since the crash in 2007 and the CML predicted a further rise in 2013.
Coming up with a sizeable deposit was the most pressing challenge for first-time buyers, the CML said in its latest News and Views. “No-one would pretend that the current market is easy for first-time buyers – but neither was the pre-crunch market,” it said.
“In a country with a decades-long backlog of producing too little new housing to match the increase in population growth, the pressure is on, across all tenures to make housing affordable for the UK’s inhabitants.”
The number of 90% and higher loan-to-value (LTV) products has doubled over the past two years and 13% of all house purchase loans in the last quarter of 2012 were for more than 90% of the property value, it reported.
However, the proportion of first-time buyers entering the market without assistance has remained relatively stagnant over the past three years.
However, Paradigm Mortgage Services chief executive Bob Hunt questioned the optimism surrounding first-time buyers in a blog for Mortgage Solutions out today, noting most 95% and 90% products come with huge caveats attached.