Loans to first-time buyers in London and the Celtic nations were at their highest levels since the financial crisis in Q2, according to regional statistics from the Council of Mortgage Lenders.
In the second quarter, 11,200 loans were advanced to first-time buyers in London, the largest quarterly number since the fourth quarter of 2007, when 12,700 loans were advanced. This is a 38 per cent increase on 8,100 loans advanced in Q2 2012.
London’s first-time buyers made up 56 per cent of all house purchases in Q2, up from 48 per cent a year earlier. Typically, first-time buyers borrowed £192,640, up from £183,881 a year earlier.
Some 6,500 loans were advanced to first-time buyers in Scotland in Q2, the highest number since Q2 2008, when 6,600 loans were advanced. This is a 33 per cent increase on the 4,900 loans advanced to first-time buyers in Q2 2012.
Mortgage Advice Bureau head of lending Brian Murphy says: “The figures are positive news for the capital’s consumers, as access to the property market is clearly improving despite warnings of an impending housing bubble.
“Although property prices are on the rise, competition between lenders has opened up the market for first-time buyers, with growing product choice and competitive rates.”
First-time buyers in Scotland made up 45 per cent of all house purchase loans in Q2, up from 39 per cent a year earlier. On average, they borrowed £89,943 in Q2, up from £83,300 in Q2 the previous year.
Wales witnessed the largest number of loans to first-time buyers in six years, with 2,700 first-time buyers advanced mortgages. At 2,700, lending was up 28.5 per cent on Q2 2012, when 2,100 loans were advanced to first-time buyers.
Welsh first-time buyers made up 44 per cent of all house purchases in Q2, up from 38 per cent in Q2 2012, while the typical advance was £93,454, up from £87,995 a year earlier.
In Northern Ireland, first-time buyer lending by volume was at its highest level since the last quarter of 2009. A total of 1,500 loans were advanced to first-time buyers, a 36 per cent increase on the 1,100 loans advanced in Q2 2012.
First-time buyer lending made up 63 per cent of all house purchases in the second quarter, up from 55 per cent a year earlier. On average first-time buyers borrowed £71,000 in the second quarter, up from £69,750 a year earlier.
Affordability in London remains tighter than in the UK overall with first-time buyers borrowing an average of 3.67 times their income compared to 3.3 for the UK overall in the second quarter. However, this is up from 3.59 in Q2 a year earlier.
First-time buyers in Scotland typically borrowed 2.91 times their income up from 2.86 in the second quarter of last year. But this is still considerably lower than the UK average.
Affordability remained fairly static in the second quarter, with first-time buyers typically borrowing 3.17 times their income, compared to 3.16 in Q2 2012.
Affordability in Northern Ireland got tighter on an annual basis, however, with borrowers typically borrowing 3 times their income in Q2 2012 but this fell to 2.81 in Q2 2013.
CML director general Paul Smee says: “Mortgage lending in London has followed a similar pattern to the rest of the UK with strong house purchase activity this quarter, strengthened particularly by first-time buyer activity.
“Total lending for house purchase has also increased this quarter upon last and from a year ago which suggests increasing confidence that economic conditions are becoming more favourable.”