Council of Mortgage Lenders: First Time Buyers continue to enter the housing market

First-time buyers took out 24,400 loans in March, 24% more than in March last year, according to the latest CML UK lending data.

In quarter one of 2014, there were 34% more first-time buyer loans compared to the first quarter of 2013.

The typical first-time buyer income multiple decreased slightly, with first-time buyers typically borrowing 3.41 times their gross income compared to 3.42 in February.

The typical loan size for first-time buyers was £118,750 in March which was unchanged from February. First-time buyers' typical household income fell slightly to £35,704 in March from £36,000 in February.

The data also showed good news for the rest of the market. The total number of new loans to home-owners for house purchase increased 4% in March compared to the previous month and was 17% up on March 2013.

Home-mover loans was the same in March as in February but the number of loans was 11% higher than in March 2013. In quarter one of 2014, home movers took out 79,000 loans, a decrease of 19% compared to the previous quarter but up 20% on the same period last year.

The total number of loans taken out for remortgage in March was 2% higher than in February and 5% higher than in March 2013.

The Bank of England reported earlier this month gross UK mortgage lending was £15.3 billion in March, a 4% rise compared to February, and up 32% in value compared to March last year.

Paul Smee, director general of the CML, said: “All types of lending show positive year-on-year growth but the rate of increase is not as frenetic as at the end of 2013."

Commenting, Alan Cleary, managing director of Precise Mortgages, said: “Amidst recent speculation about the state of the housing market, a further increase in the number of first-time buyers comes as welcome news.

“With the labour market bolstered and signs of all round economic improvement across the UK, these optimistic figures from the CML further cement the view that the property market is thriving too."

Mark Harris, chief executive of mortgage broker SPF Private Clients, believes the recent comments by Bank of England Governor Mark Carney wil help: “With the economic recovery continuing apace - unemployment falling, wages rising and inflation edging off further - the markets have been anticipating an early interest rate rise. However the Bank of England has dampened speculation that interest rates will rise soon with Governor Mark Carney declaring that they will remain low “for some time”.