First time buyer mortgages increase by 74%.
Newly released figures show an 74% increase in the number of first time buyer mortgages.
As expected, the finish of stamp duty relief in March led to an increase in activity but the level to which first time buyer mortgages increased was beyond the level predicted by the CML.
In March the number of first timers accepted for a mortgage was 74% up on February 2012 and 57% up on March 2011. First time buyer loans were worth around £3 billion, which is 76% up on February this year and 67% up on March last year. The first time sector made up 42% of all mortgages in March which is the highest level recorded since 2001.
Around 63% of first-timers approved for a mortgage this March, were exempt from paying stamp duty as they bought a home valued less than £250,000, 98% took out a straight repayment mortgage. A total of 27,200 mortgages worth over £4 billion were approved in March which was up 19% when compared by value to February 2012.
However this increase in activity is being attributed solely to the end of the stamp duty concession, levels are expected to fall back in the coming months.
Lenders have introduced incentives and help for first timers faced with stamp duty costs, and the Government has introduced the NewBuy scheme which is hoped will fill gap left by the end of the stamp duty concession.
It is anticipated that it will take some time to see if the NewBuy scheme and lender incentives go anyway towards improving sales.
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