Signs good for first-time buyers

Things are looking up for first time buyers, according to new figures from the Council of Mortgage Lenders.

15:15 21 January 2005

Things are looking up for first time buyers, according to new figures from the Council of Mortgage Lenders.

Figures released today show that in 2004 the number of new entrants to the property market increased on the previous year.

And with stable interest rates and low house price growth expected for 2005, things will only get better.

Council of Mortgage Lenders director general Michael Coogan commented: "Over the year as a whole we anticipate a stable [mortgage] market, with a healthy level of activity but without the dramatic increases in house prices and lending volumes experienced in 2004.

"Against this backdrop, homeowners are likely to lose some of their appetite for borrowing against their housing equity, and first-time buyers may well see affordability constraints ease a little as their earnings have a chance to grow more quickly than house prices."

The Council of Mortgage Lenders' figures show that 31 per cent of loans for house purchases went to first-time buyers in 2004, up from 2003's 29 per cent.

Additionally the typical first-time buyer borrowed 86 per cent of the value of the property, down three per cent from 2003. The Council of Mortgage Lenders explained that as house prices have risen, buyers have needed to come up with higher deposits, which accounted for this fall.