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Number of UK first-time buyers at their highest level since December 2002

Figures released recently by the Council of Mortgage Lenders (CML) would seem to indicate that all those stories you’ve been hearing for years about first-time home buyers not being able to afford to get on the UK housing ladder may just be an old housewives tale, with recorded numbers showing that 39,500 home buyers took out a first-time home mortgage loan in June – up 14% from May – which represents a staggering 36% of all new home mortgage loans approved during this period. These numbers also show first-time home buyers in the UK being at their highest level since December 2002.

First time home buyersNot even the possibility of rising interests rates appears to have dented the enthusiasm for Britons looking to get their foot on the first rung of the property ladder, with the average first-time buyer in the UK borrowing 3.21 times their annual income in order to secure the home purchase of their dreams.

It could well be the case, however, that recently released data which indicates that a majority of UK parents now see it as being their duty to handover as much as £30,000 to their children, to assist them in the purchase of their first home, could well mean that even these increased borrowing-to-earning figures should still mean that the average first-time home buyer in the UK is left with a well structured and manageable home mortgage loan.

Probably taking advantage of first-time UK home buyer promotional packages, with a hint of British natural caution with where interest rates may be going, however, can be seen by the fact that 68% of all approved new home mortgage loans in the CML report were fixed-rate mortgages and a further 24% of all approved new home mortgage loans were tracker mortgages.

If for no other reason, the figures released by the CML will be encouraging to both borrowers and lenders of UK home mortgage loans alike as they clearly indicate that the market for first-time home buyers in Britain is vibrant, but at the same time these figures also clearly show that most home buyers in the UK today are looking around and structuring their home purchase loans both innovatively and sensibly by opting to lock themselves in to short-to-medium term home mortgage loans with attractive fixed rates, which, at the same time, also allows the borrowers the comfort of living securely in their new homes in the knowledge that they can afford to safely pay their home loan mortgage lender each month.

Richard Smith
10th August 2006

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