18 Aug

First-time buyer lending on the rise

First-time buyer lending on the rise

The total amount borrowed by first-time buyers increased in June, according to the Council of Mortgage Lenders (CML).

However, despite this rise, borrowing levels remain relatively the same as in June 2014.

Overall, there was an increase in homeowner remortgaging activity during June, with data showing a third month of positive borrowing levels.

There were also good results for the buy-to-let sector, with a strong increase in buy-to-let remortgaging.

According to CML, this upsurge in remortgaging could be due to concerns over a possible rise in interest rates.

Paul Smee, director general of the CML, explained: "It is likely that people are now beginning to feel a rate rise is a realistic prospect and not just a distant theoretical possibility. After a slower than expected start to the year, lending now appears to be picking up as we expected, and in line with our recently revised forecasts."

Meanwhile, a lack of affordable housing could be undermining the ability for first-time buyers to step on to the property ladder.

Patrick Bamford, director of mortgage insurance Europe for Genworth, believes a solution could be to look at the availability of high loan to value products.

He added: "The only way to overcome the existing shortfall in first time buyer numbers and support the ambitions of home ownership is if affordable mortgages, those requiring just five per cent or ten per cent deposits, are made available permanently."ADNFCR-1222-ID-801798007-ADNFCR

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