First-time buyer mortgage borrowing increase

10-Dec-2008

More Britons are using first-time buyer (FTB) mortgages to get on to the property ladder, figures have shown.

Data from the Council of Mortgage Lenders (CML) revealed that 15,400 home purchase loans were approved for FTBs during October, an increase of 15 per cent since September.

The statistics indicate that more people have been looking to purchase their first property since chancellor Alistair Darling announced in September that homes worth £175,000 or less would be exempt from stamp duty.

CML figures showed that overall gross lending increased by six per cent during October, but was 44 per cent lower than the same month last year.

Michael Coogan, director general of the group, said mortgage lenders have faced conflicting pressures, such as reducing borrowing rates on the one hand, while also protecting the interests of existing savers.

"We believe the government urgently needs to review the cumulative effect of the approach it has taken in the recapitalisation process on large lenders’ willingness and capacity to lend," he commented.

Interest rate cuts of 1.5 per cent in November and one per cent in December could convince many Britons to start planning the purchase of their first home.

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