First-time home buyer numbers surge
The proportion of first-time buyers taking out loans with a deposit of 10% or less has increased to its highest level in four years, the Council of Mortgage Lenders (CML) said.
%VIRTUAL-SkimlinksPromo%Some 19,100 loans worth £2.4 billion were advanced to people buying their first home during the month, showing a 20% month-on-month increase, according to the CML's figures.
A quarter of first-time buyers put down a deposit of 10% or less in the first three months of 2013, which is the highest share since 2009 and up from a fifth in the same period last year. First-time buyers are continuing to account for an increasing share of house purchase loans, rising to 45% in March from 43% in February.
The figures were released as the Royal Institution of Chartered Surveyors (RICS) reported that demand for homes generally reached its highest level in more than three years last month, helped by Government schemes to reinvigorate the housing market.
Mortgage availability has increased sharply and lenders have slashed their rates since the Government launched the Funding for Lending scheme in August, which gives banks access to cheap finance to help borrowers.
There have been signs that the scheme has prompted stronger competition among lenders to attract first-time buyers, with the launch of some innovative low-deposit deals.
Another Government scheme, called NewBuy, allows people to buy a new-build home with a deposit of just 5%. A further initiative called Help to Buy, for people with a low deposit, will be fully fired into action next year.
The CML said lending to first-time buyers in the first quarter of this year was "only marginally shy" of activity levels in the same period a year ago, when the ending of a stamp duty concession for this sector prompted a rush of people trying to make purchases before the deadline.
The CML's figures also showed that £3.8 billion of loans were advanced to home movers in March, marking an 11% increase on February. Meanwhile, RICS reported that interest from new buyers reached its highest level since November 2009 last month.