First time buyer mortgages accounted for just 35% of total mortgages sold in April, down rather than up on 38% in the previous April, the Council for Mortgage Lenders CML said in its monthly report this week.
This gives the first time buyer mortgage category its lowest proportion of the total market since September 2007.
The conclusion is of a continuing shortage of easily accessible first time buyer mortgage deals, according to the CML. “The low share of the market shows that getting a mortgage remains problematic for first time buyers, who tend not to have a substantial deposit,” said the CML’s statement.
There were a total of 40,000 UK mortgage deals advanced in April, of a total value of £5.7bn, compared with 45,000 in March and and 35,000 the previous April. However, April generally shows a seasonal dip due to the Easter break, and the underlying trend is of a gradual recovery in mortgage lending, said the Council for Mortgage Lenders CML.
The dip was more strongly felt in remortgage activity, with 24,000 remortgage loans in April, down by 16% on March and down 26% on a year ago.
The CML expects rates to remain low for the immediate future and, with lending criteria still tight, remortgaging is likely to remain muted.
“Easter traditionally causes a dampening of lending levels and this year was no exception. First time buyers were particularly affected, perhaps because of the alteration of stamp duty, and in anticipation of the changes arising from the economic and political uncertainty of recent months,” said Michael Coogan, director general of the Council for Mortgage Lenders CML.
The Council for Mortgage Lenders represents banks, building societies and lenders who account for 94% of all residential mortgage lending in the UK.
There are currently 11.4 million mortgages in the UK, with loans worth over £1.2 trillion, according to the CML.
