First-time buyers continue to struggle
18 July 2003
First-time buyers are continuing to struggle to get a foot on the property market.
Latest figures from the Council of Mortgage Lenders show that only 30,000 first-time buyers entered the market in June, compared to 48,000 in the same month last year.
The number of first-time buyers accounted for just 29 per cent of total mortgage borrowers, compared to 44 per cent last June.
More than half of all mortgages taken out in June were at fixed rates. Fixed rate lending accounted for 53 per cent of loans for house purchase and remortgages, and the average fixed rate was 4.19 per cent. Variable rate lending accounted for 47 per cent of lending, at an average rate of 4.06 per cent.
Commenting on the figures, CML Director General Michael Coogan said: "Despite very affordable mortgage rates, high house prices are making it difficult for first-time buyers to enter the market."
He continued, "This is beginning to make it harder for sellers further up the chain to sell their properties.
This is one of the reasons why the CML expects the slowdown in momentum to continue, as lending discipline and affordability will constrain the potential for rapid house price growth. But lending potential remains extremely positive, not least because we expect remortgaging to remain strong."
Mr Coogan added that the general backdrop masked dramatic differences between affordability in different parts of the country.
The Survey of Mortgage Lenders (SML) looks at completions by more than 50 lenders across the mortgage market.