Number of first-time buyers highest in 10 months
The number of first-time buyers being approved for a mortgage reached its highest peak for 10 months in June, according to research from the Council of Mortgage Lenders (CML).
In total, 18,100 mortgages were taken out by first-time buyers worth £2.2 billion – 24% more than in May.
The CML says this was mainly because lending requirements has remained unchanged, and not become any stricter.
The average first-time buyer deposit stood at 20% in June. But while this is lower than the average of 25% seen in 2009, it is still much higher than the 10% average seen before the credit crunch.
Overall, there were 46,700 mortgage loans approved, worth £4.6 billion, in June – an increase of 22% compared to in May. However, it was still a drop of 11% compared with June last year.
Paul Smee, director general of CML, says while there are clearly financial uncertainties ahead, it is encouraging to see more house buyers surfacing at the start of summer.
"Recent increases in Bank of England approvals figures also show that more completions are expected in July, so the more encouraging numbers may persist for a while," he adds.
Chris Gardner, spokesperson of director of independent mortgage broker, obligo.co.uk, says these results reflect the surge in higher loan-to-value (LTV) products on the market.
"There are now plenty of competitive 90% products in the market and we are also seeing more lenders move into higher LTVs, which is driving rates down further. In recent months, more lenders have even returned to the 95% LTV range, although these products are still in relatively limited supply.
"Sellers are increasingly accepting that they have to lower their asking prices if they want to find a buyer, while buyers understand that they cannot go in with unrealistic offers," he adds.