The proportion of first-time buyers was down from 39% in March and 38% in April 2009 and highlights the continuing difficulties new buyers have accessing a mortgage without a substantial deposit.
The CML figures revealed that, overall, 40,000 loans were advanced for house purchase in April worth £5.7bn, down from 45,000 (worth £6.3bn) in March. Yet, this was up on April 2009’s figure of 35,000 loans (worth £4.5 billion).
The CML said April’s dip was expected due to the Easter break and the underlying trend is of a gradual recovery in house purchase lending.
Nevertheless, remortgage activity in April was hit more strongly by the dip, falling 16% on March to 24,000 remortgage loans worth £2.9bn. This was 26% lower both in volume and value than a year ago.
The CML predicted that remortgaging will remain “muted” due to the expectation that interest rates will remain low for the immediate future and lending criteria continuing to be tight.
A higher number of LTV deals on the market has not yet translated into a sustained increase in loans to borrowers with low deposits, with the average first-time buyer borrowing 75% and the typical homemover 67%.
Michael Coogan, director-general of the CML, said: “Easter traditionally causes a dampening of lending levels and this year was no exception. First-time buyers were particularly affected, perhaps because of the alteration to Stamp Duty, and in anticipation of the changes arising from the economic and political uncertainty of recent months.
“Lending for house purchase still looks modestly positive compared to 2009. But there remain a number of significant risks to this – in particular the potential for increased public sector unemployment arising from the government’s debt reduction programme, and higher taxation feeding into levels of disposable income.”
