This increase, along with growth in lending to home movers, has resulted in a jump in total house purchase lending. Remortgage lending dipped back in June compared to May, although continues to trend above levels earlier this year.
The data shows that 25,300 loans were advanced to first-time buyers in June, a 30% increase on the 19,400 loans advanced in June last year. Following the strength in first-time buyer activity in May and June, quarterly lending to first-time buyers was at its highest since 2007.
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First-time buyers continued to increase the amount they borrowed – with an average loan size of £117,000 in June up from £112,500 in May. As a result of this, there has been a stronger growth in the value of loans advanced to first-time buyers which totaled £3.5bn – an increase of 9% in value compared to May and 40% on June last year.
This is likely to be associated with the growth in house prices in recent months - in June, 34% bought a home less than £125k, down from 37% in May.
While first-time buyers borrowed more in June, an increase in income, along with falling interest rates mean that there has been no deterioration in the affordability of these loans as typical first-time buyers mortgage payments consumed 19.3% of first-time buyers' income – unchanged from May.
First-time buyers accounted for 46% of all house purchase loans in June, which was up from 44% in May and considerably higher than the 38% seen on average since 2007.
(CD/JP)
