Mortgage market still ‘jumpy’

The number of first-time buyers jumped 23 per cent in January but the market is in for a “bumpy” ride this year, the Council of Mortgage Lenders (CML) has revealed.
By The Newsroom
Published 14th Mar 2012, 06:00 BST

About 13,200 mortgage loans were taken out by first-time buyers in January, worth £1.6bn, a 23 per cent increase both in the number of loans and their value, CML figures showed.

The number of home movers also increased year-on-year, with 22,400 loans made to this sector in January, worth £3.6bn, a 20 per cent increase in volume and a 16 per cent increase in value.

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The first-time buyer proportion of the market slumped back to a three-year low last autumn but estate agents and lenders have reported a recent surge in activity as the current two-year stamp duty concession for this sector of the market, which raises the threshold for first-time buyers from £125,000 to £250,000, is due to finish at the end of next week.

Overall, January saw 35,600 house purchase loans worth £5.3bn, a rise in 22 per cent by volume and 23 per cent by value on a year ago.

However, the month still recorded its traditional seasonal “dip”, with 25 per cent fewer mortgages taken out for house purchases than during December 2011 overall. Remortgages dropped by 6 per cent month-on-month to 26,600.

CML director general Paul Smee said: “The year-on-year rise in house purchase lending suggests that lending levels are generally rising although we expect the trajectory to be bumpy rather than smooth this year.”