Rise in mortgage lending to first-time buyers

First-time buyer activity helped sustain lending for residential property purchases in June, according to fresh data published by the Council of Mortgage Lenders (CML).

The figures show that lending to first-time buyers during the month was at its highest since July 2010 - with the exception of March this year, when first-time buyer activity was boosted by the stamp duty concession.

First-time buyer purchases helped deliver an increase in lending for house buying, but a contraction in remortgaging led to a decline in lending overall. Gross lending totalled £11.7bn in June, 6% lower than May's total of £12.5bn and 7% lower than in last June.

First-time buyer activity, which had been affected in the spring by the stamp duty concession ending in March, held up in June. The return to a more normal pattern of activity continued, with half of buyers in this group purchasing properties priced between £125,000 and £250,000.

"First-time buyer activity is showing some signs of resilience as we move away from the obvious effects of the stamp duty concession, a trend that it would be good to see maintained," said CML director general Paul Smee.

The hike in mortgage lending to first-time buyers comes as no surprise to the head of the country's largest HomeBuy Agent, as the popularity of their affordable home ownership schemes continue to rise.

Margaret Snook, head of the HomeBuy Agency, said: "We have seen a growing number of applications from first-time buyers keen to get their foot on the property ladder. In March, we saw a record 182 homes go through to completion as the stamp duty holiday came to an end. And in the first quarter of this financial year, almost five hundred households moved into a new home through our HomeBuy schemes.

"Schemes such as FirstBuy and shared ownership really help first-time buyers, as the deposit needed is often reduced in comparison to traditional mortgages."