First time buyers buck lending trends

The Council of Mortgage Lenders latest figures have revealed that despite a general market contraction in mortgaging, lending to new buyers increased throughout June.

Lending to first time buyers increased to the highest level since July 2010, apart from in March 2012.

Gross lending was down 6% from May’s total of £12.5 billion to £11.7 billion in June. The figure was 7% down on June 2011.

June’s remortgage loans were down 20.9% on May, and 24.5% on June 2011.

CML director general, Paul Smee said: "Lending figures have see-sawed in the first half of the year, and we may see more fluctuations in the coming months as the effects of the Olympics and other special events in the UK this year are reflected in our lending numbers."

Mr Smee commented on how encouraging the resilience of the first time buyer market was.

Commenting on the figures, Brian Murphy, head of lending at the Mortgage Advice Bureau, said: “We saw something of a price war among lenders in July, with HSBC leading the way back below the psychologically important 3% on five-year fixed rates.”

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