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News: First-time buyers borrow 22% more

Fri, 12 Dec 14

First-time buyers are now borrowing over a fifth more than a year ago, according to the Council of Mortgage Lenders.

The latest CML figures show that overall lending grew in October 2014, a rise led by new buyers. Indeed first-time buyers saw a month-on-month lending increase of 12 per cent, with 29,900 first-time buyer loans approved in October. In terms of value, £4.4 billion was advanced to first-time buyers in October - 22 per cent higher than October 2013.

Lending to home movers also strengthened month-on-month. In October, the number of loans advanced to movers was 35,000, a 10 per cent rise on the previous month. By value, lending to movers totalled £6.5 billion, up 10 per cent on October last year.

Remortgage lending activity saw a decline month-on-month in October, with the number of remortgage loans totalling 26,600, down 6 per cent from September. By value, lending fell 5 per cent year-on-year to £4.1 billion.

While first time buyers are enjoying more favourable conditions, though, landlords are also capitalising on demand for rental properties. Indeed, there were 19,600 buy-to-let loans in October, representing lending of £2.7bn. Compared to October 2013, the number of loans increased 22 per cent and the value of these loans went up 29 per cent.
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Paul Smee, director general of the CML, hails 2014 as "a year of change" for the industry, following the introduction of the Mortgage Market Review regulations.

"There have been fluctuations month to month but overall the market appears to be showing a positive direction of travel going into the new year," he comments.

Now, he adds, it is time to see how the Stamp Duty reform announced last week by George Osborne will affect the market going into next year.

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