(Newswire.net via — March 11, 2013)The number of first-time buyers reached the highest level in 2012 since 2007.
Figures have shown that 216,000 new home-owners stepped on to the property ladder last year.
The news brings more hope to the beleaguered mortgage market that has struggled since the crash.
It indicates that new home-owners are able to get mortgages that have eluded them in the recent past.
The Council of Mortgage Lenders release the figures that showed a year-on-year increase in first-time buyer numbers of 12 per cent.
It is the first time in five years that the numbers have exceeded 200,000.
The CML figures also showed that the total number of mortgages handed out last year was the most since 2007 – 540,200. These were worth £89.9 billion.
The crash of 2007 resulted in the value of homes decreasing, and also led to lenders tightening their borrowing criteria.
It meant the first-time buyers were required to find bigger and bigger deposits, which they simply couldn’t afford.
It meant the first-time buyers were required to find bigger and bigger deposits, which they simply were unable to afford.
Where previously lenders were happy to sell 125 per cent mortgages, they quickly pulled up the drawbridge to millions of would-be borrowers.
Figures from the Council of Mortgage Lenders showed that lending for first-time buyers grew in strength over the last quarter of 2012.
This directly followed the introduction of the government’s Funding for Lending Scheme, which pumped money into the sector and also reduce risk for lenders.
A total of 60,500 loans worth £7.6 billion were given to first-time buyers in the last quarter of 2012.
This is an eight per cent increase for the previous quarter and up 14 per cent on the last quarter of 2011.
New buyers accounted for 42 per cent of all house purchase lending, above the 38 per cent seen through the rest of the year.
The number of high loan-to-value mortgages on offer to new buyers also increased during 2012.
The CML said there was “a modest but discernible increase” in lending at these levels.
Its director general Paul Smee said: “Despite the seasonal dip in lending that we normally see in December, the underlying trend for year-on-year increases in house purchase activity continued in 2012.
“First-time buyers, in particular, have benefited from the effects of better funding conditions and the Funding for Lending scheme, with the number of new people moving into home-ownership in 2012 reaching the highest level for five years.
“This, along with other factors, confirms that lenders really are open for business.”
Max Erksine writes for remortgagenow.co you can visit the website here for expert remortgage advice.