First time buyer numbers rise across UK

Robyn Hall

August 28, 2013

Wales advanced more loans to first-time buyers in the second quarter of 2013 than in any other single quarter since the end of 2007.

A total of 2,700 loans were advanced to first-time buyers in the second quarter of 2013 which marked a significant increase on the 2,000 loans in the first quarter and up from 2,100 in the second quarter of 2012.

The average value of the loans also increased to £93,453 in the second quarter compared to £88,355 in the first quarter. This meant that there was a stronger growth in the total value of lending to first-time buyers in Wales which totalled £270m, an increase of 35% on the second quarter last year and 42% higher than the first quarter of 2013.

The typical deposit of first-time buyers in Wales remains at 15%, something that has not changed since the third quarter of 2011 and lower than the 20% typical deposit size seen on average throughout the UK.

Peter Hughes, chairman of CML Cymru, said: “The positive growth trends we are seeing in Wales this quarter and the increasing confidence are very encouraging.

“First-time buyer levels being at their highest since 2007 is hugely welcome and, along with the growth in all other sectors, suggests lenders are very much open for business.”

In Scotland first-time buyer lending was at the highest level since 2008 and a total of £630m was advanced to first-time buyers in the second quarter. This represents an increase of 54% compared to the first quarter and 40% year on year.

With comparatively lower property prices than in the UK as a whole, first-time buyers in Scotland continued to borrow less relative to income than in the UK as a whole. First-time buyers in Scotland typically borrowed 2.91 times their income up from 2.81 in the first quarter of the year but considerably lower than the 3.3 times borrowed by first-time buyers on average in the UK.

The loan to value ratio increased slightly in Scotland for first-time buyers, a trend seen UK-wide, to 82% of the property value, in comparison to quarter one when it was 80%.

Iain Malloch, chair of CML Scotland, said: “The positive growth in lending to first-time buyers has led to a welcome increase in lending for house purchases in Scotland.

“With comparatively lower prices in Scotland than in the UK as a whole, first time buyers are able to borrow less relative to income. There is clearly value in the Scottish market which provides a great opportunity to get on the housing ladder.”

Northern Ireland’s recent resurgence also continued with first-time buyer numbers increasing for the third consecutive quarter.

The number of loans to first-time buyers increased by 36% in the second quarter of 2013 compared to the same period last year.

This uptake resulted in the largest number of loans advanced to first-time buyers in a single quarter since the end of 2009.

The number of loans for house purchases also advanced in Northern Ireland increased by 20% in the second quarter of 2013 compared to both quarter one and the second quarter last year. This represents the first year on year increase in house purchase lending in Northern Ireland since the start of 2012.

Brian McCormick, chair of the CML in Northern Ireland, said: “The overall increase in lending is most welcome, and first-time buyers seem to be a key driver in this growth.

“House prices in Northern Ireland are starting to stabilise and in the second quarter we did not see a year on year fall which is a very positive sign, alongside lending increases, for the future.”

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