First-time buyer numbers soar across UK

Robyn Hall

February 26, 2013

But the home mover market was less buoyant with lending in Wales, Scotland, Northern Ireland and London in decline year-on-year.

In Wales the number of loans advanced to first-time buyers reached its largest yearly total in five years and during the fourth quarter advances increased by 14% on the third quarter and the last quarter of 2011.

Peter Hughes, chair of CML Cymru, said despite positive first-time buyer numbers the Welsh market still faced challenges.

He said: “House prices fell marginally in 2012 and real incomes remain low compared to the rest of the UK but schemes such as NewBuy Cymru and the Funding for Lending scheme should start to have a positive impact on mortgage affordability as the year progresses.”

First-time buyers in Wales borrowed on average 3.12 times their income in the fourth quarter, lower than the 3.26 times borrowed by their counterparts in the UK.

The average first-time LTV was also lower at 85% and with lower house prices, on average, more first-time buyers were exempt from paying stamp duty than in the UK.

In total throughout 2012, 8,700 loans were advanced to first-time buyers in Wales, up by 5% compared to 2011.

But this growth did not cross over into the home-move market which fell back slightly from 13,600 loans in 2011 to 13,500 in 2012.


London’s first-time buyers rose by 15% in 2012 to 37,300 up from 32,400 in 2011; marking the largest annual total since 2007.

This was a 17% increase on the fourth quarter of 2011 which represented a larger boost compared to the UK overall, where lending to first-time buyers increased by 14% compared to the fourth quarter of 2011.

Affordability remained tighter, however, with Londoners borrowing 3.59 x income in the fourth quarter compared to 3.26 x for first-time buyers in other parts of the UK.

CML director general Paul Smee said: “These figures show that first-time buyers in London are regaining their confidence and returning to the market. Even though property in London remains more expensive than in the rest of the UK low interest rates and the increased availability of high LTV mortgages for borrowers with smaller deposits has enabled more would-be homeowners to enter the market than any time in the last five years.”

First-time buyers in London also put down larger deposits than in the UK overall. The average loan to value ratio remained at 75% in the fourth quarter and 2012 overall, compared to 80% in the UK.

As with the rest of the UK, lending to home movers in London fell in the fourth quarter. A total of 9,600 loans, worth £2.6 billion, were advanced which represented a 7% fall compared to the third quarter but a 4% rise on the fourth quarter last year.

CML figures for the rest of England were not available.


Following the upward trend Scotland’s first-time buyers rose to 19,000 in 2012; a 13% increase on the previous year and the largest annual total in four years.

In quarter four of 2012, 5,200 first-time buyers bought their first home in Scotland, a 4% increase compared to the third quarter and up by 18% on the same period in 2011.

And first-time buyers in Scotland borrowed considerably less than their UK counterparts at 2.88 times their income.

Scotland also saw a fall in lending to home movers in the fourth quarter for the second consecutive quarter. A total of 7,100 loans were advanced to home movers compared to 7,300 in the third quarter and 7,200 in the same period in 2011. This represented a 3% fall on the previous quarter and a 1% fall compared to the fourth quarter of 2011.

Despite the slight easing in the second half of the year, there was a small increase in lending to home movers for 2012 overall. A total of 27,600 loans were advanced to home movers up marginally from 27, 500 loans in 2011.

Iain Malloch, chair of CML Scotland, said the Scottish housing market showed positive signs of recovery.

He said: “The availability of mortgages at more than 90% loan-to-value has more than doubled in the last two years and lenders expect to offer more high loan-to-value mortgages this year. This, and the fact that the number of first-time buyers is at a post-crunch high, suggests that lenders really are open for business.”

Northern Ireland

A total of 5,100 first-time buyers entered the market in 2012, up from 4,700 in 2011 and represented the largest amount of loans to first-time buyers since 2007.

In quarter four 1,400 loans were advances which was an increase of 8% on the third quarter and the same as the last quarter of 2011.

First-time buyers in Northern Ireland typically borrowed 80% of their property’s value using 2.89 times their income to do so.

But year-on-year, the number of loans advanced to home movers fell by 10% in 2012 compared to 2011 amounting to 3,600 loans down from 4,000 in 2011.

Lending to home movers was weaker in Northern Ireland than in the rest of the UK in 2012 possibly due to the steeper house price falls in Northern Ireland and the subsequent reduction in housing equity for existing homeowners decreasing the deposit available to them to put towards another property.

Derek Wilson, chair of the CML in Northern Ireland, said: “First-time buyers are still finding mortgage affordability more favourable than the UK overall, which we hope will have a flow on effect to the rest of the market in the near future.”

Ben Thompson, MD, Legal & General Mortgage Club, said: “The regional picture is positive across the UK. We have seen strong figures posted in Northern Ireland, Wales and Scotland, however London is still very much leading the recovery. Whilst the market is moving in the right direction, a fragmented recovery looks set to continue in the short-term as the housing market shakes off the issues it has been facing and starts to claw itself back to something approaching normal in 2015.

“According to our report in conjunction with the Cebr ‘A New Normal in the Housing Market’ the overall UK picture is set to remain broadly flat in 2013 and the speed of this move to eventual recovery in 2015 is also set to vary by region.

“Our study shows that homeowners in Brighton (62%) and Bristol (67%) are the most optimistic about securing a fair price for their home if they sell now. However, this optimism is not shared in Nottingham (35%) and Belfast (33%) illustrating the divergence in attitudes and experiences across the country at the moment.”

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