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First-time buyer numbers buoyant

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First-time buyers numbers have enjoyed their best start to a year since since 2008, according to research released by the Council of Mortgage Lenders (CML).

The trade body reported that new buyer activity in the first two months of 2013 was the best start to a year since the financial crisis. This was thanks to the 17% year-on-year rise in first-time buyers. In total 32,300 FTB mortgages were completed in this two month period.

In February, first-time buyers made up 43% of all house purchase loans with the CML reporting an increase in the proportion of properties purchased for under £125,000.

By contrast the number of home mover loans declined during the month, falling 4% to 21,500. This figure also represents a 3% fall on the same point last year.

The average loan-to-value of a home mover mortgage has remained to 70%, for first-timers this figure has risen to 80%.

A total of 37,900 loans were advanced by home movers and first-time buyers during February. These loans amount to £5.5bn and are up 5% on the same time last year.

CML director-general Paul Smee said: “First-time buyers are continuing to take advantage of more favourable market conditions, helping to drive the underlying trend for resilient house purchase lending.

“We hope that the new initiatives announced by the government in the 2013 Budget will further stimulate first-time buyer activity but also help those ‘second steppers’ looking to move into a new or existing home.”

Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “Undoubtedly, Funding for Lending is playing a significant part, pushing down mortgage rates to record lows.

“Hardly a week goes by without a new ‘lowest ever’ fixed-rate mortgage being launched, which is encouraging borrowers to be more positive about their chances of getting a mortgage and being able to afford it.

“Let’s not get carried away: there are still clouds on the horizon, most notably what is happening in the wider economy and in Europe. But confidence – something so crucial to the health of the housing market – is finally starting to improve, along with the weather.”

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