First-time buyer activity gathering pace
First-time buyer activity is gathering pace, with borrowing reaching £5.9 billion in June, a 9% increase on the same month in the previous year.
June was a busy month for first-time buyers, with data from the Council of Mortgage Lenders (CML) showing that 36,000 loans were taken out, which is a 26% increase on May.
The amount borrowed by first-time buyers has been rising consistently month-on-month.
Paul Smee, Head of Mortgages at UK Finance (CML), said: “June’s figures show a busy month in the mortgage market, with home movers having their highest monthly activity levels for over a year and an especially high number of loans for first time buyers.”
The surge in borrowing from first-time buyers demonstrates that the government’s intentions are being realised. In recent years, the buy-to-let sector has been hit by a wave of tax and stamp duty changes, all designed to inhibit investor activity to free up space in the market for first-time buyers.
With all the changes impacting the buy-to-let market, including mortgage interest tax relief, there is some fear landlords will start to sell their properties, potentially driving up rents for tenants, especially in London.
Rents are already putting financial pressure on some tenants. According to new figures published in the Evening Standard, Londoner’s are spending over half their monthly income on rent. In Islington, workers living in the borough spent on average 63.9% of their earnings on rent.
However, it is positive to see more movement from first-time buyers, while in other news it’s revealed that the majority of landlords remain confident in the buy-to-let market.
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