The Council of Mortgage Lenders has published figures indicating a significant rise in the number of first time buyers for January this year versus the same month last year. The number and value of first time buyer mortgages both grew by 23% compared with January last year.
That very positive figure of course belies a market that continues to provide real challenges to first time buyers. The figures are 30% down on those of December 2011 although that would be the expectation accounting for seasonal trends. The housing market goes quiet around the festive period even with the current muted level of transactions.
The figures also revealed that over the last year first time buyers have borrowed up to 80% of the property, highlighting one of the major barriers to home ownership that has hit first time buyers hard. Having to build a significant deposit whilst still meeting rental requirements that have typically increased is a big ask for first time buyers.
Many will still be biding their time and those making it onto the ladder will in many cases have had help from a parent to boost their deposit. Those with only a small deposit also face higher interest rates as a result and with funding still difficult for lenders there is no expectation that will change in a hurry.
To end on a brighter note The Council of Mortgage Lenders did express a hope that the average deposit size would drift down slightly. The hope is that the new Government backed initiative for new homes, NewBuy, may help to improve availability of mortgages for those with only a small deposit.