First-timers thin on the ground as house prices keep rising
The number of first-time homebuyers fell in February to the lowest level in two years, according to the Council of Mortgage Lenders (CML).
Mortgages taken out by first-timers dropped to 25,600 from 26,400 the month before, in line with seasonal trends, but the total is also down on the same period last year and is the lowest since March 2005.
The data also showed that more homebuyers were choosing a fixed rate mortgage, reflecting general concern that there are more interest rate rises to come in the near future and that the cost of borrowing will continue to rise.
Michael Coogan, director general of the CML, said: “With the chance of at least one more interest rate rise this year, first-time buyers are taking the sensible option of taking out fixed rate deals, and locking into the payment security that they provide.”
He continued: “First-time buyers are the most financially stretched group and the fact that a record number of them are choosing a fixed rate deal demonstrates their desire to plan ahead and avoid the risks interest rate rises will bring.”
Many commentators have observed that the market has responded to the interest rate rises by cooling slightly and most believe that the Bank Rate is high enough.