The number of loans to first-time buyers fell by 7 per cent in July to 32,400 according to new statistics from the Council of Mortgage Lenders.
The value of loans to FTBs fell by 4 per cent to £4.4bn. Affordability continued to worsen with the typical FTB income multiple rising to a record 3.39 in July, up from 3.37 in June and 3.23 a year earlier.
CML says that FTBs taking out loans in July typically committed 19.7 per cent of their income to pay their mortgage interest.
In addition, the number and value of mortgages taken out by both homebuyers and those remortgaging fell in July. But lending not accounted for by house purchase or remortgaging rose to its highest-ever value – £7.8bn – and accounted for 23 per cent of the total, its highest ever proportion according to the CML.
There were 94,000 loans for house purchasing totally £14.8bn in July and 92,000 remortgage loans totalling £11.5bn.
Fixed rates accounted for 79 per cent of house purchase and remortgage loans.
CML director general Michael Coogan says: “A slight fall in lending between June and July has emerged for the third year in a row, so of course we cannot read too much into a single month’s figures. But the long-anticipated slowdown in the housing and mortgage markets may now be beginning to materialise.
“Last week’s MPC decision to hold rates was exactly as expected. Both market conditions and sentiment are coming off the boil, and affordability is ever more stretched, but consumers should not expect any immediate easing in the financial pressures they face.”