I was interested to read a report from the Council of Mortgage Lenders advising that the first quarter of 2013 sees strong first time buyer activity. According to the CML, first time buyers in March accounted for 45% of all house purchase loans. As readers of previous blogs will know a healthy property market needs first time buyer activity to be in excess of 40% so this is a very positive development.
The average loan to value ratio for first time buyers remains at 80% but there has been an increase in the proportion of first time buyers taking out loans with a deposit of 10% or less. These figures are very positive but I strongly warn against complacency. The overall market volumes are historically still very low and while the percentages are moving in the right direction the volumes are not – there were 19,100 loans advanced to first time buyers in March 2013 compared to 24,400 loans advanced in March 2012. This is not a surprise as March 2012 marked the end of first time buyers Stamp Duty holiday which resulted in a significant spike however it does show that a sustained recovery in the property market is still some way off. I am anticipating that the recent schemes announced in the budget will start having more of an impact.
It was also interesting to note that the National Association of Estate Agents and the RICS both had slightly different takes on the market. I still stick by my original predictions that the second half of 2013 will see a strong improvement in the housing market – fingers crossed!Lindsay Darroch Partner & Head of Property