More first time buyers in spite of price rises, or not?

Recent research suggests that there were 28,600 first-time buyer mortgages in June – 7% more than in May and 19% more than in June 2013.  It means that in total, almost half of residential mortgage lending – excluding remortgages and buy to let was to first time buyers. 

The data, from the Council of Mortgage Lenders, appears to be in sharp contrast to a claim by the National Association of Estate Agents that only 3% of home sales in June were to buyers under the age of 30 – an all time low. The NAEA story made front page headlines, notably in the Daily Mail. 

Although the CML data does not give their ages, it does show the number of first-time buyers rising quite dramatically. By value, loans to first-timers also went up, totalling £4.2bn – 11% up on May and 27% higher than June 2013. 

In the second quarter of this year as a whole, there were 79,900 first-time buyers loans 17% up on the first quarter and 24% up on the second quarter of last year. 

In June, the typical first-time buyer loan size was £123,865 and the typical gross income of a first time buyer household was £37,000. 

Lending to home movers also grew, but at a slower pace. In June, the number of loans to movers was 31,900, 4% up on the previous month and 11% on June last year. 

Buy-to-let lending was unaltered between May and June at 15,600 mortgages. However, compared with buy -to-let lending in June last year, it was up 38% by value and 23% by number. 

Just to complicate the issue, the National Association of Estate Agents have restated that their figures are correct having consulted 500 member branches throughout the UK.