First-time buyer numbers rose 15% in April, as more first-timers were able to access record low rates and a wider choice of mortgages, according to the latest First Time Buyer Monitor from LSL Property Services.
There were 22,000 first-time buyer transactions in April, almost 3,000 more than in March, when there were just 19,100 transactions.
And the average mortgage rate remained low, only rising slightly to 4.31% in April from a record low of 4.29% in March. Annually, the average mortgage rate was 0.35% lower than in April 2012, with falling headline rates helping to attract more first-time buyers. Buyers with smaller deposits began to reap the benefits from Funding for Lending in early 2013. The scheme has allowed lenders to offer more mortgages to high LTV borrowers.
The average LTV in April 2013 rose to 80.4% from 79.9% in April 2012, reflecting greater lending to high LTV borrowers compared to last year. However, the falling affordability of deposits kept a lid on bubbling growth in the market – and partially offset the improvements in first-time buyer mortgage availability – preventing a greater increase in transactions. The average deposit rose 3% to £27,178 in April, despite lower rates and a rise in the average LTV, because of rising house prices.
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