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BoE: First-timer loans up 52pc

Robyn Hall

June 10, 2014

From Q1 2013 to Q1 2014 the value of loans to first-time buyers increased by £3.2bn.

However the proportion of lending to first-timers declined by 0.5 percentage points from its peak in Q4 2013 to 20.1% in Q1 2014.

Loans over 90% LTV increased by 1.5 percentage points to 3.6% proportionally in Q1 2014, the highest figure since Q4 2008.

David Newnes, director of Your Move and Reeds Rains, said: “Help to Buy has helped to infuse new energy into the UK housing market.

“The scheme has helped increase higher loan to value lending, which is giving borrowers with smaller deposits a vital leg-up onto the property ladder.

“Despite rigorous new mortgage criteria, demand for first-time buyer property will not lose steam – helped along by lower deposit requirements and affordable mortgage interest rates coupled with wage growth strengthening.

“The traditional stumbling block for many prospective buyers is saving for a deposit, but we have seen the average first-time buyer deposit fall by over £2,000 in the last year.”

The value of outstanding residential loans was £1,243bn in Q1 2014, an increase of 0.4% compared with Q4 2013 and 1.2% compared with Q1 2013.

Gross advances of £47.1bn in Q1 2014 were 38.5% higher than in Q1 2013, yet in Q1 2014 they were 8.5% less than Q4 2013.

New commitments were £48.8 billion in Q1 2014, a decline of 3% from Q4 2013 but a rise of 37.5% since Q1 2013.

Buy-to-let lending increased by 66% year-on-year from £4.1bn in Q1 2013 to £6.8bn in Q1 2014, the highest recorded figure since Q2 2008.

The proportion of fixed rate gross advances increased for the sixth consecutive quarter to 81% in Q1 2014, 10.3 percentage points higher than Q1 2013 and the highest proportion since 2007.

The number of new arrears cases was 5% lower in Q1 2014 than in Q4 2013 at 27,761, the lowest quarterly number since the series began in 2007.

The total number of loan accounts with reportable arrears decreased from 264,862 in Q4 2013 to 255,561 in Q1 2014, a reduction of 3.5%.


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