The number of mortgages taken out by fledgling buyers increased by 4.5% on a monthly basis and 8% on a year earlier to reach 30,100, while the value rose annually by 9% and 4% since October to total £4.7m.
Despite buy-to-let lending recording its strongest monthly lending level since stamp duty changes were imposed on second properties last April, the volume and value of lending was still down significantly on a year earlier, by 33% and 31%, respectively. Remortgaging helped to drive activity in the sector in November, as 16% more remortgaging deals were taken out by landlords than in October.
Mark Dyason, director of mortgage broker Edinburgh Mortgage Advice, said the first-time buyer market was likely to flourish throughout 2017 as lending to landlords tailed off.
“First-time buyers are starting to fill the hole left by landlords,” he said. “Since 1 January, it has become a lot more difficult for landlords to finance their properties, especially at higher loan-to-values, and so a rush to remortgage in the final months of 2016 was inevitable.”
Overall lending to homeowners in November increased to £11bn, up by 5% month-on-month and 2% year-on-year, while the number of loans also rose in November, according to the latest House Price Index published by the Office for National Statistics. Average house prices increased by 7% in the year to November 2016 and up by 1% a month earlier to total £217,928.
Homeowners in the West Midlands enjoyed the biggest rise in average property prices from October to November climbing by 2%, while the South East suffered the biggest drop in growth as prices inched up by just 0.3% down from 0.6% in October.
Andrew Montlake, director at Coreco, said rising prices could stall aspiring homebuyers from securing a foot on the housing ladder.
“The unrelenting march of house prices will disappoint many first-time buyers who have been hoping that prices would correct enough to help them get on the property ladder and take advantage of some extraordinarily low mortgage rates,” he added.
“There is some good news, however, as lenders are continuing to support high loan-to-value mortgage products at rates which are as competitive as they have ever been.”