Lending to home movers fell – contributing to an overall dip in house purchase lending – while remortgage lending also eased.
A total of 16,400 loans were advanced to first-time buyers in February, up on 15,900 in January and 14,000 at the same time last year. By value, loans to first-time buyers totalled £2 billion, the same amount as the previous month, but 18% higher than in February 2012 (1.7 billion).
First-time buyers accounted for 43% of all house purchase loans in February. This was the sixth consecutive month that this indicator has been at or above 40%, suggesting that market conditions continue to improve for first-time buyers.
Indicators of loan affordability also suggest that the market was marginally more favourable for first-time buyers in February. First-time buyers typically borrowed a smaller amount in February than in January, both in absolute terms and relative to their income. First-time buyers typically borrowed 3.19 times their income in February, down from 3.2 times in January, while the average loan to value ratio remained at 80%.
This is likely to be associated with a shift towards the purchase of less expensive properties by first-time buyers, with a small increase in the proportion of properties bought for less than £125,000.
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