Mortgage lending figures encouraging
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by Gill Montia
Lending to first-time buyers and home movers increased in February, according to the Council of Mortgage Lenders (CML).
During the month, 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 year-on-year.
February was the last full month of the stamp duty concession and the CML says it is not yet clear whether the end of the stamp duty concession will lead to a falling off in first-time buyer numbers, or how much this might be offset by the Government’s NewBuy scheme.
Also of note, the proportion of income first-time buyers spent on mortgage interest payments increased for the first time since April 2011, rising from 12.1% in January, to 12.5%.
According to the CML, the rise is likely to reflect higher first-time buyer income multiples (up from an average 3.19 in January, to 3.23) and slightly higher borrowing rates.
Home movers took out 22,500 loans worth £3.7 billion in February, a 2% increase in number and a 3% increase in value from January and a 16% rise in number and 19% increase in value year-on-year.
Remortgaging continued to decrease with the £3.3 billion advanced representing a 6% fall compared both to January 2012 and February 2011.
Finally, since the summer of 2011, over 95% of first-time buyers have taken out repayment loans and February’s proportion stood at 96%.
Repayment loans to home movers and remortgagors also increased slightly – from 81% to 82% for home movers and from 76% to 77% for those remortgaging.
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