There were 14,100 loans worth £1.7bn taken out by first-time buyers in February, up 8% by number and 6% by value from January 2012.
House purchase lending also rose in February, with 36,600 loans taken out. This was up 4% by number and 2% by value from January. Home movers took out 22,500 loans worth £3.7bn, up 2% in number and 3% in value from January.
However, remortgaging continued to decrease in February. The CML said £3.3bn was advanced, a 6% fall compared both to January 2012 and February 2011.
Mark Hollands, director at brokerage Love Money, said: “The drop in remortgages is a surprise given what’s happening to standard variable rates (SVRs). We are increasingly seeing more clients looking to remortgage onto fixed rates, which protects them against the volatile market conditions. Clearly there is still a degree of interest rate inertia.
“Borrowers need to be extremely vigilant about the vagaries of the wholesale money markets, which are driving up the cost of their loans.”
The CML found an increase in the proportion of income for first-time buyers spent on mortgage interest payments, from 12.1% in January to 12.5% in February.
It said that this is likely to reflect a combination of factors including an increase in average first-time buyer income multiples, from 3.19 to 3.23, and a modest increase in some borrowing rates.
However, this still leaves mortgages for first-time buyers much more affordable than as recently as 2008 said the CML, when borrowers on average spent 19.6% of their income on mortgage interest payments.
First-time buyers borrowed on average 80% of their property’s value in February, unchanged in over a year.
Paul Smee (pictured), CML director general said: “It is encouraging to see the continuing year-on-year improvement in house purchase lending. However, it is not yet clear whether the end of the Stamp Duty concession will lead to a falling off in first-time buyer numbers and how much this may be offset by the government’s NewBuy scheme.”
Earlier today, Halifax became the fourth lender after the Royal Bank of Scotland, Nationwide and Barclays, to launch NewBuy products. Santander is due to launch NewBuy deals later this year.
