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Newsletter

First-time mortgages decrease

By Jonathan Dawes, Tue 9 Sep 2008 - Published in Mortgages

Figures released by the Council of Mortgage Lenders (CML) reveal that mortgages to first-time buyers decreased in July this year.

The number of loans to the group fell to 17,300, representing a five per cent drop on the previous month and a 48 per cent decline from July last year.

First-time buyers borrowed 3.24 times their income on average, which is the lowest multiple since July 2006.

Overall, there were 47,400 mortgages in July, worth a total of £7.1 billion, which is unchanged from June.

However, the figures reveal a 51 per cent fall in volume and a 54 per cent decrease in value when compared to July 2007.

Furthermore, there were 85,000 remortgage loans during the period in question, with a value of £11.9 billion.

Michael Coogan, CML director general, commented: "Tighter lending criteria have clearly made it more difficult for first-time buyers to enter the market."

He also said the changes to stamp duty and the shared equity measures revealed last week "will be helpful to those first-time buyers looking to enter now, but many may be waiting for house prices to stabilise".

Last week, the CML welcomed the government's changes to the housing market, but called for further funding to increase its long-term stability.