First-time buyers made up the lowest proportion of house purchase loans since September 2007, according to new data from the Council of Mortgage Lenders.
FTBs accounted for 35% of all house purchase mortgages, down from 39% in March and 38% in April 2009, as those without a sizeable deposit are unable to obtain mortgage finance.
Overall, there were 40,000 loans advanced for house purchase in April worth £5.7 billion, down from 45,000 (worth £6.3 billion) in March but up from 35,000 (worth £4.5 billion) in April 2009. April’s seasonal dip was expected due to the Easter break and the underlying trend is of a gradual recovery in house purchase lending.
The dip was more strongly felt in remortgage activity, where the trend remains firmly down in contrast to lending for house purchase. There were 24,000 remortgage loans worth £2.9 billion, down 16% (17% in value) from March and 26% lower (both in volume and value) than a year ago. With expectations for rates to remain low for the immediate future, and lending criteria still tight, remortgaging is likely to remain muted.
Although the CML notes that there has been some increase this year in the number of higher loan-to-value products available, this has not yet translated into a sustained increase in loans to borrowers with lower deposits. The tentative signs of easing experienced in March returned to their previous levels in April, with the typical first-time buyer borrowing 75% and the typical home mover 67% of their property’s value.
Michael Coogan, director general of the CML, said: “Easter traditionally causes a dampening of lending levels and this year was no exception. First-time buyers were particularly affected